Editorial: Control is behind the shift to contracts

Government specifies what charities do when it controls the purse strings, says Stephen Cook

Stephen Cook, editor, Third Sector
Stephen Cook, editor, Third Sector

The figures in the NCVO's UK Civil Society Almanac 2009 confirm that government continues to be a powerful force in shaping the charity sector.

The income charities brought in from statutory sources grew to £12bn in the year to March 2007, up 5 per cent on the previous year. This sum formed more than 36 per cent of their total income.

At the same time, the proportion of that £12bn that came in the form of income from contracts continued to grow at the expense of grant income. At the turn of the century, £4.6bn out of £8.4bn of statutory income consisted of grants. Six years later, the figures were £4.2bn out of the £12bn. The trend is clear.

What does this mean in practice? One indication comes in our feature on page 14, where Mike Potter, who commissions children's services for Westminster City Council, says some charities come "with a firm idea of what they want to provide rather than what we are asking them to provide. Over the past few years there has been a cultural shift away from that attitude."

That attitude is, broadly speaking, that of organisations that would rather work under grants than contracts.

Another indication came in our feature last week, when Debra Allcock Tyler gave a candid account of how the Government insisted that grant funding of the Directory of Social Change's government funding website should cease in favour of a contract.

The underlying issue seems to be control: Westminster wants to specify its children's services rather than let the providing charity set the parameters. The Office of the Third Sector wants to specify the funding website more tightly and own the intellectual property. He who pays the piper calls the tune.

The familiar dilemma of independence and service delivery thus becomes broader and deeper. Charities manage it in different ways. There was debate about the shrinking space of civil society at the NCVO conference last week. Does the work charities do for government fit in that space?

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