Big Society Messages By Government Don't Stack Up

First Posted: 02/08/2011 09:42 BST Updated: 01/10/2011 11:12 BST

As we've all discovered in the past few years, £86m is not a large amount of money in government terms.

Francis Maude claims he's managed to save 40 times that amount in the last few months alone, just by cutting Whitehall overheads and scrapping consultants. The cost of the campaign in Libya is believed to be well over £200m so far - though that comes out of the government's 'contingency fund', which apparently explains the whole thing away.

So why would this trite amount of money be cut from charities helping some of the most vulnerable in society? Aah, replies the government. This isn't our cop, it's local government's. We've given them the money, it's not our fault how they spend it.

Strictly speaking minsters are correct, these decisions are largely being made not by them, but by local councils. But this doesn't excuse the government from answering some serious questions on why measures to support the voluntary sector have slipped down the agenda in Whitehall, in favour of what Downing Street obviously sees as some of the more big ticket items.

Legislation reforming schools, the financial sector and the NHS are being pushed through the Commons as fast as possible - we've seen that in parliament throughout the last ten months. Legislation to introduce elected Police Commissioners went more or less straight to Bill with only a brief consultation - no green nor white paper.

Yet the government has dragged its feet in implementing the 'Big Society' measures it claims are central to its agenda. On July 29 the Cabinet Office announced: "The vision for a Big Society came much closer today as the Big Society Bank – now officially named Big Society Capital – became a reality with the establishment of two expert boards".

Ultimately the Big Society Bank - funded largely by the Big Four high street banks and designed to channel money into the voluntary sector - will have up to £600m to play with. But it'll take a while for those investments to be allocated. A third of that money will come from dormant bank accounts which haven't been touched for more than 15 years, and the EU still has to rule on whether it's legal to raid those accounts.

At the same time the 'nudge' element of the Big Society, enshrined in the Giving White Paper, was only published in May. There is no draft legislation and no obvious timetable for it. The Chancellor implemented several measures to make it easier and less complicated for charities to claim Gift Aid from the Treasury in the Budget in March - but that was part of George Osborne's second Budget and it only cleared the Commons two weeks ago.

The result, according to Howard Lake from fundraising.co.uk, is the 'black hole' in funding we're talking about today. He says: "We've been talking about Big Society for two years. Fabulous conversations and debates, but how far forward are we from then? The Big Society Bank still isn't here, but already the cuts have hit.

"There are about four or five major cuts by government in charity income this year, even before the funding cuts kick in. Many of the initiatives mentioned in the Giving White Paper are not really new. It's been slow to come, when it did come it didn't make any changes - and even when those changes did come, like inheritance tax thresholds, the analysis of that showed it would only affect a tiny number of people, and it's doesn't come in until 2013. Speed doesn't seem to be a hallmark of the Giving White Paper, and speed is what charities need. They needed it six months ago."

Many also believe that the Big Society measures outlined so far focus too much on getting people with smaller incomes to give more, and fail to tap into the wealthiest in society. For Plum Lomax at New Philanthropy Capital, the measures being outlined are missing the point.

"The White Paper was disappointing in some ways. It focused too much on the retail end of giving - like encouraging giving through cash points. But what's really going to make a big difference is encouraging at the higher-end - the wealthiest people in society."

It's not clear why the Tories have taken more than a year to get these projects off the ground, when they more than anyone would have known that the funding for charities was about to undergo severe cuts. We now face at least a year of this black hole, when the cuts have already kicked in but the measures to mitigate those cuts haven't come on line. And that's a central government fail.

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