Caron Bradshaw: Freedom of information is turning up the temperature

Margaret Hodge's suggestion that charities delivering public services should have 'open book accounting' raises some important questions

There is a danger of outsourcing the risk and difficulties of delivering public services to the charity sector, while preserving the good bits for government, writes Caron Bradshaw
There is a danger of outsourcing the risk and difficulties of delivering public services to the charity sector, while preserving the good bits for government, writes Caron Bradshaw

I once heard Shami Chakrabarti, the director of Liberty, say that if you drop a live frog into a boiling pan of water, self-preservation will make it jump out. However, if you put the same frog into tepid water and gently turn up the heat, it will allow you to boil it to death. Please do not try this at home.

She was discussing the erosion of liberty - that "freedom dies not with a bang but a whimper". But I think that, in other ways, there is a danger that the sector is being brought to the boil.

At the CFG's recent annual conference, Margaret Hodge, chair of the Public Accounts Committee, made a controversial but, perhaps surprisingly, not widely reported comment about charities and disclosure. Hodge suggested that the Freedom of Information Act 2000 ought to apply fully to charities that receive public money and that we ought to have "open-book accounting" when taxpayers' money is involved.

When it was introduced, the FOI act was described as a watershed in the relationship between the government and the people, brought in to ensure that public authorities that spend taxpayers' money and make decisions that affect people's lives are held to account. Described as being "applicant-blind" - in other words, taking no account of the motive of the requesting party - the act stated that information it applied to should be disclosed unless there is a good reason not to do so.

Of course, there are already some circumstances in which charities and the information they hold is subject to the act. However, Hodge's comments raise at least two big questions. First, are charities' grant or contract payments to deliver public services in effect now being annexed by the state? Second, when terms such as "taxpayers' money" are used, what lies beneath? Does it go beyond this explicit government or local government funding to include tax reliefs or Gift Aid?

In principle, I'm in favour of openness and the compulsion to answer our stakeholders' questions unless there is a good reason not to. In many respects I also welcome the increasingly blurred lines between public, private and charitable entities. But I question whether the extension of the act in this way would be to ensure that the public can hold government to account. I am also sceptical that this "open-book accounting" approach would apply equally among the sectors. Call me a cynic, but this push appears to outsource to the charity sector the risk and difficulties of delivering public services, while preserving the good bits for government.

In the same session, Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations, pointed out that only a small proportion of charities received government funding. But if Hodge's call for taxpayers to be able to follow their pound extends to Gift Aid or the sector's tax reliefs, we had better brace ourselves not for a framework that sets out what and when to disclose, but for one that sets out when it is acceptable not to disclose. It might be a subtle difference in language, but it feels to me like the water is getting a trifle hot.

Caron Bradshaw is chief executive of the Charity Finance Group

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