Opinion: If you can't beat 'em, go commercial

Nick Cater, a consultant and writer: catercharity@yahoo.co.uk

Last week's National Audit Office report Working with the Third Sector has proved an indictment of the Government's mismanagement as it uses contracts and grants to turn charities into cheap labour while escaping its responsibilities and undermining the public sector.

The NAO declares that most charities "have not seen any general improvement in funding practices since 2002, and in some cases funding practices are perceived to have worsened ... Funding problems are particularly acute at local level ... There has been little progress on reimbursing the full costs of service delivery".

The NAO finds charities are kept on the choke-chain of annual contracts by "a general suspicion and lack of trust together with a tendency to underrate the sector's professionalism and ability to deliver public services".

It adds: "Without trust, partnerships cannot work." We get the picture: ignorance, arrogance, incompetence.

Of course, the NAO finds time to blame charities, too, although it mistakes their problems as technical and managerial rather than a lust for money from any source, whatever the conditions weighing it down, which in turn risks the loss of any semblance of independence.

Compare and contrast the experience of such captive charities begging for crumbs with companies gaining multi-billion pound public-sector contracts through private finance initiatives to build hospitals and the like, otherwise known as stealing us all blind and providing the Government with a convenient off-the-books fiddle.

Charities perform sterling work at rock-bottom prices, get monitored for every penny and pushed around like schoolkids in a sweet shop; PFI companies deliver projects late and massively over budget, renegotiate contracts to demand even more millions to benefit the few, and do it all under a cloak of secrecy. And they get their funders' respect.

There is a better way for charities. They could create their own companies, even joint ventures with others to share overheads, and get respect, better deals, more freedom and real profits. Forget grants, just bid for full-price contracts, hire the talent from parent charities and use profits for core charity costs and investment in future capacity.

If government funders won't take charities seriously, don't be a charity. Or take an even more radical solution to public sector funding: just say "no".

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