The future of the sector looks familiar

Things have changed, but also stayed the same, says Peter Gotham of Gotham Erskine

Peter Gotham
Peter Gotham

A new year is a time for reflection and resolutions - to capitalise on new opportunities, and to avoid the repetition of past mistakes.

In my case, this is a chance to look back on the past six years, because I have just stood down as chair of the Charities and Voluntary Sector special interest group of the Institute of Chartered Accountants in England and Wales. In those halcyon days of 2004, when I took up the role, the IT world had survived the millennium and Google was poised to change the world. The economy was booming, the Labour government and the Mayor of London, Ken Livingstone, were throwing money at the public and voluntary sectors, and the Charities Act 2006 was on the horizon.

Back then, we were looking forward to Sorp 2005, the Better Regulation Task Force had yet to report on "making life easier for those who help others", and the Accounting Standards Board was considering its statement of principles for financial reporting, published the following year.

Things have changed, but they have also stayed the same. We are now, for example, potentially looking forward to Sorp 2012, another review of how government and charities work together and another review of accounting for public entities.

In 2005, the position was that individual members of the institute had always been very active in the sector, but the institute itself had a less consistent engagement. So we began a coordinated effort to ramp up the institute's involvement with the sector - initially by increasing support to our members and working with the obvious candidates, such as the Charity Finance Directors' Group. It has worked well, and today the institute is much more part of the landscape of the not-for-profit sector.

The sector has changed over the past six years but, despite all efforts, there is still much debate over its regulatory framework and the delivery mechanisms through which it works with government.

In many ways, the avowed objectives of the coalition government appear similar to those of the previous Labour administration: passing power to local agencies and making regulation proportionate to risk. However, one of the problems with the scattergun development of Labour's initiatives - so rapid that it was difficult to understand or work with - could well be seen again.

In the meantime, the resource landscape has changed out of all recognition. The sector will have to fight hard, and be smart, or it will see a few large, politically connected agencies - from both private and voluntary sectors - walk away with the bulk of the government funding.

A case in point is the Transition Fund, which will provide grants to help charities deal with cuts in public spending. The closing date for the fund was 21 January, by which time few organisations affected by the cuts would have had any real indication of their 2011/12 statutory funding. The short timescale means it may well be hoovered up disproportionately by a handful of larger charities, which are better able to present evidence to support their applications.

There are good signs for the sector. It feels as if the umbrella bodies and informal networks that support it are operating effectively. Structurally, it is much better trained and informed, and is able to mobilise using both old-fashioned and new media routes. But when we look back in January 2012, or January 2013, we are going to see radical changes, both to the funding regime and to the sector as a whole.

- Peter Gotham is a partner at Gotham Erskine

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