The voluntary sector’s independence is at a five-year low and could sink further in the wake of recent scandals and a fall in the influence charities have over public policy, according to a new report.
Independence in Question, published today by the think tank Civil Exchange, is the fifth in a series of annual reports on the voluntary sector’s independence. The first four were by the Panel on the Independence of the Voluntary Sector, which published its final report in February 2015.
Today’s report says the sector's independence is in a worse state than at any point since the panel began its work and warns that the charity sector must work collaboratively to make its voice heard.
Threats to charities’ independence include the anti-lobbying clause that will be inserted into all government grant agreements, a lack of Charity Commission independence, the lobbying act, increasing commerciality and a culture of self-censorship, the report says.
Caroline Slocock, director of Civil Exchange and the report’s principal author, said it argues that the cumulative impact of challenges over the past five years and more recent threats "leave an unhealthy imbalance between community, private sector and state power, and the sector in a critical position".
She said: "What we are seeing is a worsening picture for many charities – one in which they play by new, draconian rules or face a crisis of funding that threatens their existence. If these threats go unchecked, the UK’s proud tradition of vibrant, independent charitable activity will be undermined and many communities will be disempowered as a result.
"The sector must come together to defend its independence – or fall."
The report looks at charities’ independence of purpose – their ability to stay true to their mission; their independence of voice – their ability to campaign; and their independence of action – their ability deliver activities and to use assets according to trustees’ discretion.
"This report finds that the voluntary sector in 2016 has significantly less influence with the government than in 2010 and is in a far weaker position financially," it says.
The report is particularly critical of the anti-lobbying clause, warning that it "may only be a matter of time" before the use of such clauses is extended further.
"A wedge is slowly being driven between the idea that charities should pursue good causes on the one hand and the use of their knowledge to shape better government and democratic debate on the other," the report says.
It traces the origins of the clause to the lobbying act – the Transparency of Lobbying, Non-party Campaigning and Trade Union Administration Act 2014 – which was ostensibly aimed at corporate lobbyists as well, but included restrictions on charity sector campaigning.
"The government must now face serious questions about why it is taking such a restrictive view of campaigning and policy work by the charity sector but has taken so little effective action in relation to corporate lobbying, despite the huge imbalance in their relative influence," the report says.
The report also criticises the Charity Commission, outlining concerns about its "over-politicised style of enforcement" and its "heavy-handed" treatment of some Muslim charities. It accuses the commission and the government of breaking the Compact – the agreement between charities and government that guarantees the independence of charities.
A spokesman for the Charity Commission said the regulator had always been clear that it respected charities’ independence."Indeed charity law makes clear that charity trustees must act independently," he said.
He said the commission was independent of both government and the voluntary sector and took seriously its responsibility to regulate charities on behalf of the public.
The report reiterates calls made in last year’s report for a stronger, binding Compact.
But it warns that "self-censorship remains a major, if unreported, issue", citing the lobbying act, negative press coverage and terms of contracts as reasons why charities might feel the safest option is not to speak out.
The report concludes: "The key to defending external threats to independence is to work collectively to defend the legitimate voice of the sector; to identify new forms of funding and working that better support independent action and collaboration; and at an organisational level to maintain a clear focus on independent mission with funding that supports it."