Leather issues 'wake-up call' on delivery of public services

A stark warning about the dangers of public service delivery, including mission drift, inadequate funding and a potential "Tescoisation" of the sector, will be issued today by Dame Suzi Leather, chair of the Charity Commission.

Leather: authority 'is sacrosanct' (Credit: Newscast)
Leather: authority 'is sacrosanct' (Credit: Newscast)

Her warning is based on a survey of 3,800 charities by the commission, which shows that only 26 per cent of those delivering public services feel free to make decisions without pressure to conform to funders' wishes.

"Of even greater concern, only a fraction above half agree their activities are determined by the charity's mission, rather than funding priorities," Leather will tell NCVO's annual conference.

The survey shows that more than 30 per cent of charities engaged in public service delivery rely on government contracts for 80 per cent or more of their income. This rises to 67 per cent for charities with incomes of more than £10m.

Leather will say her "wake-up call" applies particularly to trustees: "It's trustees who face the consequences if mission drift becomes a breach of trust. For their sake, as well as the sake of the charity, I would urge them to view independence as absolute, non-negotiable and sacrosanct."

The survey shows that only 12 per cent of charities delivering public services always achieve full cost recovery. Leather will link this in part to a decision by the commission in 2004 about leisure trusts in Trafford and Wigan. It ruled that charities can in exceptional circumstances subsidise delivery of public services if this is in the best interests of beneficiaries.

"I am concerned that some local authorities may believe the impact of Trafford and Wigan is that they can now expect charities to provide public services or fund gaps in provision," she will say.

"Under-funding threatens the survival of charities delivering public services. Charities themselves, commissioning authorities and government all have to address this urgently."

Smaller charities are being squeezed out as councils shun multiple providers, she will add, but such "Tescoisation" can be countered by bidding in consortia.

- See News, page 2, and Editorial, page 15.

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