Charities plan to share services

Eight of the UK's largest charities, including Guide Dogs, RNIB and Scope, are considering setting up a separate company to manage shared services such as payroll, HR and investment management.

Initial talks on the proposal, which could result in job losses, have already taken place. Consultant John Pepin, who initiated the idea, will now meet each of the participants to discuss their "interest, capacity and need". A second meeting is to be set up following the first round of talks in June.

The eight charities have been asked to contribute to a fund that will finance the best way of taking the idea forward. The identities of the other five still involved have not been revealed. Four additional charities, including Oxfam, decided not to proceed after attending the first round of talks.

Lloyds TSB Foundation and the Baring Foundation also attended the initial get-together. It is speculated that they could provide start-up funding.

According to Pepin, the benefits of a separate "management service organisation" include cost savings, increased popularity with funders, the freeing up of management time to focus on the mission and even the opportunity to make a profit.

Pepin added that a separate for-profit company, based on the example of several charities in the US, was not the only option on the table.

"There are different models. It could be a separate company, a not-for-profit organisation or an exchange of services. We are in the early stages and basic questions still have to be answered," he said.

Geraldine Peacock, chief executive of Guide Dogs, said the charity "would be interested in seeing the business plan and the model for the company".

Peacock added that charity chief executives interested in Pepin's proposal were talking informally about the different ways of sharing services.

"You could develop an internal market through reciprocal arrangements.

For example, Guide Dogs is good at legacy maximising and our payroll could be done by another charity," she said.

Peacock heads one of the five government task groups established to determine how to spend the Treasury's £125 million futurebuilders fund, aimed at facilitating third-sector involvement in public services. The group examines how to make existing resources go further. "Sharing back office support functions is an obvious example," she said.

Chris Ball, voluntary-sector secretary at trade union Amicus, said: "This will make it essential that workers bargain collectively. Unless the charities concerned recognise this, I would be very worried about this development."

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