Charities could make 'substantial' profits

Charities could be allowed to make "substantial" profits from running public services, under plans outlined by Conservative leader David Cameron.

A Tory 'green paper' on voluntary action proposes letting the voluntary sector compete on an equal footing with private firms.

They would be offered longer-term contracts, while charitable giving rules would be simplified to boost donations from the public.

Accusing Labour of holding back the potential of the voluntary sector with red tape and central targets, Cameron promised a network of social enterprise zones to encourage investment in deprived areas.

And he pointed to recent research showing that only 12 per cent of charities were being paid enough to cover the costs of helping deliver public services.

Cameron, who was visiting a community centre in Kent, said: "Every day now we see new evidence of things going seriously wrong in our society. The social challenges we face today are every bit as serious as the economic challenges Britain faced in 1979.

"And now, just as then, the scale of the challenge demands radical Conservative reform.

"The big difference in British politics today is about the role of the state: Gordon Brown believes in top-down state control; we believe in bottom-up social responsibility.

"Labour believes that only the state can organise and deliver collective provision: We have a vision of non-state collective provision.

"The modern Conservative Party stands for a simple principle when it comes to social reform and the role of the state: that there is such a thing as society, it's just not the same thing as the state.

"So we want to see a transformation in the role of community groups, social enterprises and the voluntary sector in helping to build a stronger society for all of us."

Phil Hope, the government's minister for the third sector, said the proposals were "another example of the Tory leader's shallow salesmanship".

"More than half the pledges in the document today are already Labour government policies that are popular with charities, but his other promises show his true colours.

"The Tory attitude towards the third sector is patronising and dangerous. Their plans show they would leave charities to deal with some of society's most difficult problems without the money needed to do it, hoping for hand-outs rather than being funded properly to do their important work."