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August 10, 2011

Big Society stumbles

When David Cameron launched Big Society as the big idea of his new government, many believed he was genuine in his commitment to shift power and responsibility away from government although many also doubted whether he fully understood the implications of what he was proposing. New research suggests the sceptics were right as it reveals the true scale of cuts and closures being imposed on the very areas that need to be invested in

Brian Donnelly, The Herald


SCOTTISH charities could lose up to £200 million in public funding from Holyrood over the next four years as a result of the UK Government’s austerity measures, it has been claimed.

The umbrella body for voluntary organisations in Scotland warned the Scottish Government that if it passes on cuts at the level intended at Westminster, good causes could suffer an 11% drop in income.

The Scottish Council for Voluntary Organisations (SCVO) made the comments after its counterpart in England, the National Council for Voluntary Organisations, produced a report claiming UK charities stood to lose nearly £3 billion over four years under the Coalition Government’s Big Society plans.

SCVO director of public affairs John Downie said its estimates of the impact are “even more dramatic” than predicted by the NCVO. He said its report only looks at funding to the charity sector through the Scotland Office, and cuts to the Scottish block grant, estimated at 11% over the spending review period, are “much greater cause for concern”.

“If the Scottish Government were to pass that on to charities and voluntary organisations, the sector could lose as much as £200 million, leaving thousands of vulnerable people without the vital lifelines they rely on,” he said.

Mr Downie said there was concern over funding for charities at a time of widespread public-sector cuts. 

But he added: “We are confident, however, that the Scottish Government will not pass on a cut of anywhere near this size but will continue to invest in the third sector, to ensure it can increase its economic contribution, have a stronger presence in delivering public services and to use its expertise in employ-ability to create opportunities for our young people.”

Scotland’s voluntary sector has a turnover of £4.4 billion, 42% (£1.8bn) of which comes from central and local government.

Yesterday’s report came as research by the trade union-funded anti-cuts campaign False Economy suggested more than 2000 charities are having to close services and pay off staff as local authorities slash their funding.

False Economy’s director Clifford Singer said: “The idea that charities could step up and replace much of the work previously done by the public sector always looked dubious, but this latest research underlines that far from growing, the charity sector is actually shrinking.

“Never has the gap between the Government’s Big Society rhetoric and the reality of its savage cuts looked starker.”

Shadow Cabinet Office minister Tessa Jowell said: “What is becoming apparent is the scale of the cuts that charities are facing across the country, which are beginning to undermine the very building blocks of community life. It beggars belief that the Tory-led government still do not have a complete picture of the impact that their actions will have.”

A Cabinet Office spokesman said: “Big Society offers the voluntary sector many new opportunities to grow.

“Our reforms will allow the voluntary sector to bid for public-service contracts worth billions of pounds.

“Just last week Big Society Capital launched with an expected £600m to give the sector access to much-needed finance, which will help it expand and bid for these new contracts. We’re also doing more to support giving and philanthropy, including measures in the Budget.”

TUC general secretary Brendan Barber said: “[False Economy’s] authoritative research shows that for all the warm words about the Big Society, the Government has created a funding crisis for charities, with many scaling back or cutting services altogether.”

The NCVO used figures from the Government’s spending plans produced by the Office for Budget Responsibility to calculate what they believe is the first accurate estimate of the impact of the austerity programme on charities.

A Scottish Government spokesman said: “We recognise the important contribution the third sector makes to supporting our economic recovery, creating employment and skills opportunities as well improving public services and supporting communities.

“We are committed to continuing to support the sector and that’s why the core budget was increased by 16% in 2011/12 to £24m despite cuts from Westminster. This builds on the £91m which we have already invested in the third sector since 2008.”