Martin Sime is director of the Scottish Council for Voluntary Organisations, and writes a monthly column for The Caledonian Mercury.Last week, the website False Economy, backed by the TUC, released figures for England on the impact that local authority spending cuts are already having on voluntary organisations. Based on answers to freedom of information requests made to councils across England, False Economy estimates that charities will lose at least £110m this year as a result of council cuts alone – and they say that’s a conservative estimate. Many of those to lose funding are supporting children, the elderly and people with disabilities. It’s clear that the cuts are already having a severe social effect, but such a huge economic impact raises the question of whether voluntary organisations rely too much on funding from government in the first place. And it’s a question which is especially pertinent in an era of vast public spending cuts. This very question formed the basis of a blog on the Guardian website last week. In it, Harry Cole argued that if a charity receives more money in government “handouts” than through its own fundraising, then it is a “fake charity” and part of the state. His definition covers a huge number of charities which do fantastic work and maintain a high degree of independence from government. The most cursory glance at the list provided by False Economy shows that the majority of these charities are genuinely independent organisations. Organisations such as the Citizens Advice Bureau and Councils of Voluntary Service which feature heavily on the list are both active critics of government policy and work towards civic engagement and participative democracy. The idea that charities should be less dependent on state funding is one which we in the sector hear a lot – both from government and from within the sector. But the reality is that many voluntary organisations are delivering excellent services for vulnerable people, preventing future need and saving the public purse millions in the process. In Scotland, for example, around 40 per cent of social care is delivered by the third sector, receiving consistently higher quality ratings than either the public or private sector for their standard of care. Cutting this funding is removing money from where it is needed most, from the most deprived and marginalised people in our society. Comparing these cuts to removing "bureaucracy and waste" across Whitehall, as Cole does in his blog, shows a spectacular ignorance of the services provided by these organisations and the difference they make. It also raises an interesting question about who we want to be delivering public services. At the same time that people like Cole express disquiet with charities taking government money, it seems that many people are, to coin a phrase, intensely relaxed about huge private businesses making a profit out of the state. Take the construction industry, for example – the impact on builders and developers of the dramatic fall in capital expenditure by governments across the UK illustrates that sector’s reliance on public sector contracts. Closer to home, the recent awarding of Work Programme contracts to companies such as Ingeus Deloitte – established by global insurance firm Deloitte specifically to bid for Work Programme contracts and headed by a former Department for Work and Pensions civil servant – has gone almost unnoticed. Yet it almost seems like cuts to voluntary organisations by local authorities, health boards and various arms of government are being viewed as acceptable or even necessary by many. A sketch in the Financial Times last week gave some humour to the idea that the big society will somehow leap from the ashes of a decimated third sector. But it’s about time to debunk this myth. More people across all walks of life need to understand the value of third sector, both socially and economically. With an income of £4.4 billion a year, the third sector makes a vast difference to people’s lives up and down the country. But if government cuts are allowed to take their toll, those local lifelines will simply disappear. It’s time to wake up to what’s happening – after all, you don’t know what you’ve got until it’s gone.
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