It's up to you, Leather tells trustees

The Charity Commission says boards face hard choices on services.

Leather: not in favour of declaring war on the Government and local authorities over full cost recovery (Credit: Newscast)
Leather: not in favour of declaring war on the Government and local authorities over full cost recovery (Credit: Newscast)

Dame Suzi Leather last week made her mark as the iron lady of the voluntary sector with a robustly worded warning to charities that underfunded public service delivery presented trustees with a serious challenge to their independence (Third Sector, 21 February.)

The warning was based on hard facts gleaned from a survey of 3,800 charities, undertaken in the wake of the commission's decision in 2004 to grant charitable status to trusts in Wigan and Trafford that deliver local council leisure services.

But within hours of her speech, the fur was flying. Some protagonists of service delivery wondered if the regulator was becoming a polemicist and attacked the quality of the research and the questions it had asked.

One used the phrase "an orgy of divisive introspection".

At the same time, the sceptics on service delivery were smiling and saying "I told you so", while the agnostics sat on the fence and enjoyed the scrap. Eventually, some calmly worded formal statements were drafted and issued to the media (see News, page 2).

While the arguments ebbed and flowed in the policy hothouse, people from front-line organisations who listened to Leather's speech and took part in the ensuing discussion had more practical concerns.

Chaya Spitz, head of services at the Interlink Foundation, the umbrella body for orthodox Jewish voluntary organisations, asked what charities should do when faced with the choice between taking on underfunded services for people who would not otherwise be helped and running no services at all.

"Organisations are very anxious to deliver these services because it's the only way very marginal parts of society are going to be reached," she said.

Spitz added that local authorities were getting a "free ride" in the public service delivery debate, even though many problems occur at their level. "What can be done - not at third sector minister Ed Miliband's level, but at the level of local authority chief executives?" she asked.

Sally Rawlings, chief executive of Yorkshire Rural Community Council, complained that charities have to submit a lever arch file of costs when bidding for services, while private sector competitors get away with pricings on an A4 sheet. "There's a difference between full cost recovery and pricing," she said. "I don't think the sector has got it right, and I don't think local authorities understand that."

Steve Lawless from development charity Brighton and Hove Community Initiatives questioned how much the sector could do about full cost recovery. "Isn't it as much the responsibility of the commissioners?" he asked.

Leather later told Third Sector that change was an uphill struggle and that there was a limited amount the commission could do. "It's largely through trustees that we'll get the message across," she said, referring to the 45-page public service delivery guidance the commission published last week. "But we'll also be bringing the survey results to the attention of other key players, including local authorities and the Compact Commissioner."

The commission will not be revising its decision on Wigan and Trafford, Leather said, despite the concerns she expressed in her speech that some local authorities might be misinterpreting it and expecting charities to subsidise the delivery of public services. Referring it to the new Charity Tribunal when it is set up in 2008 under the new Charities Act was not a priority, according to Leather. "That is not something we have discussed," she said.

She said she was not in favour of declaring war on the Government and local authorities over full cost recovery. Like Compact Commissioner John Stoker, she seeks consensus. She also thought that the Public Services Action Plan, announced last December, would address the problem if properly implemented.

In spelling out trustees' responsibilities so starkly, Leather admitted her speech and the survey could intimidate some people and work against efforts in the sector to recruit more charity trustees. But she was not keen not to mislead people about what they'll be taking on if they agree to be a trustee. She said: "It is a heavy responsibility, and I don't think we should be in the business of trying to recruit trustees on a false prospectus."

Ultimately, she said she hoped the exercise would serve to remind trustees of their choices. "What it comes down to in the end is that it must always be in the minds of boards of trustees to say no," she said.

That's all well and good, but what was her advice to charities in the situations described by Spitz, which fear they'll neglect their beneficiaries if they refuse? "It sounds like a hard thing for me to say, but it's their decision," she said.

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