Councils and care trusts are 'breaching Compact'

Councils and primary care trusts across the UK are infringing the Compact by telling healthcare charities they will receive no extra cash for public contracts this year, a sector umbrella group has said.

The Voluntary Organisations Disability Group, an umbrella group of providers of social care support for disabled people, has so far received complaints from its members about 14 PCTs and 12 local authorities.

In a letter to one disability charity, Brent Council said: "The council is facing severe financial difficulties for 2008/09 and is seeking your assistance in securing efficiency savings. We're asking all providers to identify savings to reduce your fee levels. As a minimum, we cannot increase fees for next year."

John Adams, general secretary of the VODG, said: "Asking charities to maintain the same services, with rising costs and for no extra money, runs totally counter to the spirit of the Compact, and it breaks all the rules on full cost recovery.

"It's asking charities to use voluntary income to fund public services. You'll eventually put people out of business."

According to the VODG, disability contracts bring £1bn to the sector each year. Getting no increase this year could cost charities hundreds of millions of pounds over time because it would mean a lower starting point for increases in future years, he said.

Jess Crocker, local compact advocate at the NCVO, said it had seen a big increase since the start of the year in complaints about fees not being increased.

Crocker said that charities affected could negotiate with PCTs to reduce services and make the public aware of PCTs' policies.

"You can use your skills as a voluntary organisation to make people aware of what's happening," she said.

A spokeswoman for Brent Council denied offering no increase and said that the council had offered existing third sector contractors increases of 2 per cent for 2008/09.

"The offer is based on inflation being 3.9 per cent and the assumption that voluntary groups will make efficiency savings of 2 per cent," she said.

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