Maude criticises public sector attitude to grants

Cutting grants to voluntary organisations allows public sector authorities to avoid tackling their own problems, according to shadow Cabinet Office minister Francis Maude.

Speaking about the impact of the recession on the sector at a conference held by umbrella body the NCVO yesterday, he said: "In an environment of intense public spending control, grant aid to voluntary organisations is seen as a soft target that avoids the need for the authorities to take tough decisions on their own in-house operations. This is a real danger in these economic circumstances."

Maude also said the public sector should make more qualitative judgements when commissioning voluntary sector service providers.

"The public sector needs to be more intelligent as a customer than it has been," he said. "It needs to understand that it isn't simply the cheapest option that provides best value to the taxpayer. Savings can be huge if you solve underlying social problems."

He emphasised the Conservatives' plans to introduce payment by results for voluntary organisations that successfully rehabilitate offenders or get the unemployed back into work, similar to the approach that the Department for Work and Pensions has taken in its Welfare to Work initiative.

He said payment by results "will solve one problem that bedevils third sector providers: the inability to recover the full cost of delivery of the service, let alone make a surplus".

"There's nothing about being a non-profit organisation that says you can't make a surplus. It's a very desirable thing to do. If we want third sector organisations to grow and replicate what they do, they need to be able to build a surplus and reinvest it."

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