Andy Hillier: Our Libor fine money could be better spent

Once again the banking fine money went to military and emergency service charities, but is this fair, asks Third Sector's editor

Andy Hillier
Andy Hillier

The government’s Autumn Statement usually contains a little bit of cheer for the charity sector amid the talk of fuel duty freezes and missed economic targets.

This Wednesday’s statement was no different. The Chancellor included changes to investment limits on social investment tax relief and the announcement that £3m of funds generated from the so-called tampon tax would be given women’s organisations.

Once again, though, the biggest winners were military and emergency services charities. A total of £102m recouped from the Libor banking fines will be distributed predominantly to causes working in these areas, bringing the total amount that military and emergency services charities have received from Libor fines to more than £300m since the government began this bonanza in 2013.

The money has been allocated to some excellent causes doing some very good work: Combat Stress will receive £2.1m from the latest round of fines to care for veterans with the most complex cases of post-traumatic stress disorder, and the Royal Air Force Benevolent Fund will receive £2m to contribute towards building a respite facility for RAF veterans in the midlands.

But it does beg the question of whether it is right for military and emergency service charities to be the sole beneficiaries. Some 893 charities are listed as armed forces and emergency service charities on the Charity Commission’s database, which means that they account for just over 0.5 per cent of the 164,000 registered charities in England and Wales.

In these challenging financial times, when all manner of charities are struggling, it seems both unfair and out of touch to support one cause. Much of the political debate at present, and indeed the rhetoric emanating from the Prime Minister and her government, is focused on narrowing the gap between rich and poor and tackling ingrained poverty. Yet no money is made available to charities that are tackling such thorny issues.

Perhaps most perplexing is the lack of investment in the strengthening of governance and leadership.

Both the charities minister Rob Wilson and the Charity Commission can’t help but mention the need for charities to strengthen their leadership and governance arrangements "post-Kids Company" when they take to the platform.  

But without an additional boost of central government money it is hard to see how any genuine progress can be made. Leadership development in the charity sector has suffered as a result of a thousand cuts, and it is hardly de rigueur to spend donors’ money on senior management and trustee training at a time when jobs are being shed and services cut.

Some progressive funders such as the Lloyds Bank Foundation do offer charities leadership support in addition to grants, but the numbers that do so are low.

Sir Stephen Bubb, the former chief executive of the charity leaders body Acevo, has established the Charity Futures programme to investigate what could be done to improve the governance and leadership of charities. He has secured about £400,000 from Woodford Investment Management to support his exploratory work, but this money alone won’t stretch to a national programme.

There are multiple organisations working in this area, including Acevo, the Association of Chairs, ICSA: The Governance Institute, the Good Governance Institute and the Institute of Directors. But the work they do is not joined up and not all charities can afford their services or the membership fees that some charge.

It therefore looks increasingly likely that a single initiative will be required to galvanise them together and, importantly, provide funding directly to charities to ensure they can benefit.   

If the government is serious about supporting charities, it needs to listen to the sector and think long and hard before its next financial statement. Handing out money to chosen pet causes might go down well among its backbenches and in the shires, but it does little for its wider of aspiration of narrowing the gap. Military charities are not the only good cause.       

Andy Hillier is editor of Third Sector

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