State funding for lobbying charities creates 'sock puppet version of civil society', think tank says

But the NCVO calls the Institute of Economic Affairs report 'woefully short-sighted'

Institute of Economic Affairs report
Institute of Economic Affairs report

State funding for voluntary organisations that lobby government creates a "sock puppet version of civil society" which "subverts democracy and debases the concept of charity", according to a report published today by the think tank the Institute of Economic Affairs.

The publication, Sock Puppets: How the Government Lobbies Itself and Why, says charities are effectively given funding by government in order to build support for policies that are not in public interest but which the government itself wants to implement, and to lobby for higher taxes to pay for those policies.

But a response from the National Council for Voluntary Organisations said the report was "woefully short-sighted" and misunderstood the work that charities do.

The report says that charities are used as a mouthpiece for the state because "there is undoubtedly greater PR value in a charity calling for restrictions on liberty than would be the case if the message came directly from a bureaucrat or politician," and because "the charity worker is assumed to be driven by altruism".

It says state funding for charity means that taxpayers are forced to meet the cost of lobbying for positions that are not in their interest.

"Government funding of politically active charities, NGOs and pressure groups is objectionable on three counts," the report says. "Firstly, it subverts democracy and debases the concept of charity. Secondly, it is an unnecessary and wasteful use of taxpayers’ money. Thirdly, by funding like-minded organisations and ignoring others, genuine civil society is cold-shouldered in the political process."

The report says there should be an end to unrestricted government funding for charities, that a new title other than charity should be used for largely state-funded not-for-profit organisations, that charities that wish to receive state money should be forced to create separate subsidiaries to receive it, and that "the Charity Commission should revert to previous guidelines which forbade charities from making political campaigning their dominant activity".

Sir Stuart Etherington, chief executive of the NCVO, said: "This report is woefully short-sighted and ignores the fact that campaigning is a legitimate activity central to the work of many charities and voluntary organisations, regardless of whether they receive money from the state.

"This activity is also well understood and supported; a recent poll showed that the vast majority of the public think campaigning and lobbying is the most cost-effective activity that charities engage in.

"The independence of the sector is paramount in bringing major social issues to public attention. Who would question the efficacy and need for recent campaigns such as the London Living Wage Campaign and End Child Poverty?

"Rather than being dragged through the mire, this work should be protected, promoted and celebrated."

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