The Office for Civil Society is considering introducing measures to support charities that have dipped into their reserves in order to survive the recession, Nick Hurd, the Minister for Civil Society, has said.
Hurd told Third Sector that he could see a change of attitude in the sector as the economy recovered, but that many medium-sized charities had been badly damaged by a difficult economic period and by cuts to local authority budgets, some of which are still feeding through.
He said he wanted to ensure those organisations that were sustainable in the long term survived short-term problems.
"I want to talk to other funders about the resilience of some organisations that are eating into their reserves and are financially vulnerable," he said. "We would like to be in a position – with others – to help those organisations.
"It’s not the smallest organisations," he said. "Their fixed costs are pretty low. It’s the medium-sized charities delivering valuable services. We don’t want to lose those organisations."
But he said that the OCS was "still thinking through" exactly what form that support would take.
Hurd said that he did not want to see charities dependent on government grants "forever and ever" and that in the past there had been too much dependence on local and central government grants.
He said his decision to cut the strategic partners programme "caused some pain, but it’s had a cathartic effect on those organisations".
"We’ve seen something similar at a local level," he said. "The message we’re sending is that we want local organisations to work more efficiently. It’s not in their interest to be dependent on government forever and ever."
He said that when he first took office, and government funding cuts were announced, he had seen "endless troops of voluntary sector representatives" brought in by their MPs to talk about funding issues.
"You got used to the idea that many organisations had got used to the grant from the council and hadn’t thought how they opened up to the wider community," he said. "When that grant was threatened, they felt lost.
"It seemed like the sector went into a period of mourning for that funding, which it’s only coming through now."