Member News
3rd June 2011
Rhodri Davies, policy manager at the Charities Aid Foundation (CAF), looks at the Big Society policies that are likely to have the greatest impact on the voluntary sector
In order to assess whether the Big Society is still 'on course to deliver', we need to be able to say what it was supposed to be delivering in the first place, and how we would know when this had been achieved. Unfortunately, many would say that lack of clear answers to these questions has been one of the main problems with the programme from the outset.
We can roughly suppose that the Big Society covers four areas: public service reform, citizen empowerment, localism and increasing social action. This gives us a framework to make at least some assessment of what impact the policies we already know about might have. The Charities Aid Foundation (CAF) works to improve the lot of charities and social enterprises, so our main focus is on those policies that are likely to have the biggest impact on the voluntary sector.
As the long-awaited public service reform white paper has yet to be launched, it is hard to be certain of much of the detail in this area. However, based on what we already know, the most important policy announcements from the voluntary sector's point of view will probably be the 'right to challenge' existing service provision, and the drive to create new employee-led mutuals.
In theory these are positive moves, as they will provide opportunities both for existing civil society organisations to compete for contracts and for new social enterprises and mutuals to be created by professionals from the public sector. However, the devil will (as ever) be in the detail: there are reasons to doubt that small community organisations will really be able to compete successfully for service-delivery contracts against large commercial organisations without there also being major changes to the way services are commissioned. Similarly for public sector social enterprise spin-outs to be viable, commissioners will have to look at offering longer-term guaranteed contracts.
The other big question for charities and social enterprises looking to take advantage of new opportunities is where to get the funding they need for things like covering working capital or investing in capacity building. At a time when even commercial SMEs are struggling to get loans from banks, it is virtually impossible for most civil society organisations to access mainstream finance. This is why the launch of the Big Society bank later this year, and the injection of capital it brings into the social investment sector will be welcome, especially if it really does lead to the development of new sources of funding for the sector. However, the birth of this bank has been more problematic than many politicians might have imagined, and is still being affected by issues around the required exemption from EU state aid rules and the exact nature of the Project Merlin banks' agreed £200m investment.
The Big Society bank, as a wholesale funder of social investment intermediaries, cannot by itself deliver every goal of the government's social investment strategy. So far, however, the other elements of this strategy have not been made particularly clear. More needs to be done in terms of supporting charities and social enterprises to become investment-ready, and encouraging new social investment through incentives like new targeted tax reliefs.
The other potential new source of funding for the sector is from increased philanthropy and charitable giving. The relevant policies in this case were outlined by the government in its recent Giving white paper. There are a number of interesting ideas in this paper that may have some effect on giving in specific circumstances, such as making donations through ATMs.
However, taken as a whole it is hard to believe that this set of policies is really going to have the sort of transformative effect on UK giving habits that the Big Society programme seems to demand. Achieving major cultural change is an extremely difficult and slow process, and is only likely to happen by the incremental actions of many different organisations and individuals working together. This is what CAF has been doing for over 70 years, and we will continue to work with the government, the voluntary sector, businesses and donors to drive our culture of giving forward.
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