Focus: Finance and Governance - Outlook - The inner-city struggle with finance

Tom Fitch, director of Community Accountancy Self Help

One of the biggest problems faced by inner-city trustees is managing the finances. They struggle with basic points, such as setting up a cashbook, monitoring their spending and creating simple financial controls to prevent fraud. This can lead to failure.

Government gives hundreds of millions of pounds to small, inner-city charities. A small amount of government support for inner-city, community accountancy would help get taxpayers' money recorded properly and spent well. Many small voluntary bodies act like cement, holding our fragmented 'communities' together, creating social cohesion and stopping riots.

However, the idea that any one 'community' remains consistent is a myth.

In the inner city, up to a third of the population can change every year.

Neighbours frequently do not know each other, and social housing estates are fragmented into different ethnic communites speaking different languages.

There's a multitude of churches, mosques, temples and other religious institutions, but most people do not attend.

It is here that the community leaders created by government funding of the voluntary sector have an important role. By providing small grants, local authorities, trusts and government enable many groups to provide a service.

The chairs and co-ordinators of such groups often become respected people in the community, both inside and outside their ethnic groups. By attending forums and other voluntary sector meetings, they meet the informal leaders of other ethnic communities.

After the London bombings in July, many estates were primed to kick off at the slightest incident. In one case, a threat to kill made by a child quickly led to 30 people on the street, three ethnic groups arguing and eight police officers needing to be called.

It was the links between leaders of different ethnic supplementary schools that cooled the situation. They visited people in their homes and at the mosque, which ruled that Muslims should not become involved in a dispute that primarily involved other ethnic groups.

Many people live in a grey area between legality and illegality. Is all your home software legal? Have you ever watched a pirate DVD? Has one of your children ever downloaded some music illegally? One in every 20 houses on an inner-city estate contains a drug dealer. Many people are anti-police in such a situation. A complaint to the police about antisocial behaviour can make matters worse for the complainants, as they become visible and their property subject to vandalism.

The ability of the police to make grants to voluntary bodies and their role on local regeneration boards provide links to local community leaders.

This can help the flow of information, so police action - and arrests - become better focused.

Voluntary organisations are a critical part of the social fabric of inner-city life, but poor financial management causes failure. Government should prioritise the funding of financial training for inner-city charities.

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