Last year I gave the keynote address to the Open University Voluntary and Community Sector Leadership Conference, speaking on the sector’s resilience and responses to the cost-of-living crisis. The messages I delivered then are just as important now with an election pending.
I began with the story of small local charities – a remarkable if disconcerting one. We have seen from research commissioned during the pandemic that small charities found ways to continue human contact with the people they support, including those who most acutely felt the economic and social impact of Covid-19.
Three years later, charities are busier than ever, doing their utmost to help more people facing greater and more complex challenges. This has come at the expense of considerable pressure on staff and volunteers, with some charities having to resort to demand management techniques more common in the public sector, such as triage systems, queues and rapid telephone assessments.
This is reflected in the demand for the wellbeing support that Lloyds Bank Foundation provides alongside our grants. The impact of this on those who lead small charities concerns me. It is not sustainable.
The lecture left me reflecting on almost four decades of work in and with voluntary and community organisations, and how the context in which we operate has changed.
Like many in the late 90s I embraced the pragmatism of the post-1997 increased support from the Blair government, which set the stage for a much closer relationship between state and sector.
Many charities embraced the opportunity to become providers with a government that was agnostic as to who provides, and held a mantra that “what matters is what works”. As a consequence many larger charities grew in size and scale through contracting.
At a time of additional funding that allowed for improvement and even expansion, this seemed the right thing to do. Not least because charities were often better placed than many statutory services to provide personalised approaches and community-led peer support.
But since 2008 this has taken place against a backdrop of declining public finances and rising demand. Covid-19, the war on Ukraine and other global factors that have contributed to the cost-of-living crisis may have compounded this, but the stage was set after the financial crisis.
Unlike 1997, even with a general election imminent, there is no visible light at the end of this tunnel.
Like most Western economies, we have survived for decades on cheap money and thrived on globalisation – which has benefited international capital at the expense of local labour as work has been exported. As inflation takes hold and food and supply chain security has supplanted cost as the main consideration, this has gone.
It is also coupled with the realities of an ageing demographic, which brings the twin challenges of a declining tax base and higher social care costs that make it increasingly difficult to balance the fiscal books. 2024 is not 1996. Whoever gets elected, these harsh economic realities remain.
But as we move into 2024 there is an opportunity and responsibility to work with and influence those campaigning to lead our nation. To make the case that decisions made in the past on contracting and economic growth at people’s expense have not benefited our society.
We must choose to invest in a compassionate society that supports people who have been let down by public policy for far too long and accepts that good public services cost money. Scandinavian economies made that choice decades ago. The US has gone in the opposite direction.
I’m pretty sure which I would like to emulate for the world of my children. Not least because growth-first also comes alongside the climate and biodiversity degradation which affects us all, but the poorest and future generations the most. We need a different economic narrative.
As a sector, we need to ask ourselves what relationship we want with the state. Our objects and values should always centre on the challenges people face. And the more than 500 small charities that we support are core to local safety nets. There must come a point when we should no longer be willing to prop up failing services.
With hindsight, we may have done ourselves no favours by following the Blair government into contracting. I welcome the move of some large charities to step back from contracting or reconsider their approach. I hope more will follow.
If ever there was a need for strident advocacy that is rooted in the lived and learned experience of small grassroots charities, it is now. Funders like us have a unique role in supporting that – providing unrestricted money focused on cause.
But, as a sector, we need to act together if we are to work towards a national narrative that puts compassion before self-interest, which is surely what our sector is all about.
Paul Streets is chief executive of the Lloyds Bank Foundation for England and Wales