Threats to the independence of charities have again intensified in the past year, and the sector urgently needs to seek a new settlement with government to change ministerial attitudes to the sector, according to the final report of the Panel on the Independence of the Voluntary Sector.
The fourth and final annual assessment by the panel of sector experts, which was formed in 2011, says that since the last report four out of its six annually revisited indicators of independence show deterioration, while two have seen no improvement.
It says the sector "continues to be treated largely as interchangeable with the private sector in public contracting", has experienced threats to its campaigning role, including through the lobbying act and changes to judicial review, and is increasingly not properly consulted by government over policy changes. It says threats to the independence of the Charity Commission could have knock-on effects for the sector.
The report looks back at evidence it was given in 2014 by Polly Neate, chief executive of the Women's Aid Federation of England, and by Chris Mould, chair of the food bank charity the Trussell Trust, both detailing retaliation by public bodies after the charities spoke out on difficult issues.
It also assesses the Charity Commission's response to a complaint by a Conservative MP against a tweet sent by Oxfam, noting that new information about the charity's campaigning role was put on its website in the six months between the complaint and the commission's judgment.
This information summarises the commission's view that campaigning is allowed only so long as it is an "ancillary activity".
The report says: "The commission appears to be defining its own guidance on campaigning more restrictively than hitherto." It also notes concerns that this will be redefined further.
The report says that the commission in the past year "has appeared focused on an agenda set by the government", despite the fact it should be independent.
This is of particular concern given that views on charities that are negative or disparage their campaigning role have been expressed by various senior politicians including the Chancellor of the Exchequer, George Osborne, and the previous Minister for Civil Society, Brooks Newmark in his "stick to their knitting" comments.
The panel's report makes a reference to Canada, where it says the charity regulator "has ruled that Oxfam cannot have prevention of poverty as one of its charitable objectives, as the alleviation of poverty is what charity should be about".
In his introduction to the report, Sir Roger Singleton, chair of the panel, writes: "Under successive governments, the voluntary sector has increasingly been seen as a contractual arm of the state, without an independent mission or voice, interchangeable with the private sector. We are also starting to see a defensive attitude toward the campaigning voice of charities from some leading politicians."
The report says that government and civil servants must "hear our concerns, respond to the recommendations we have made in this report and move toward a ‘new settlement’ with the voluntary sector, based on respect for the independent value it generates in society and an understanding of how to work with it more effectively".
Among its main recommendations for governments are: the establishment of formal mechanisms for dialogue and collaboration between government and the sector; a reform of commissioning and procurement, including the removal of gagging clauses from public contracts; and the repeal of the lobbying act and changes to judicial review.
The report also announces that the Baring Foundation, which has funded the panel, has begun "actively fundraising" in order to create a new commission on the future of the voluntary sector, as called for in the panel's 2014 report, and is looking for other foundations to help create this.
Caroline Slocock, head of the secretariat to the panel since its inception, and director of the think tank Civil Exchange, said: "When the first report came out there was a lot of debate, various people and blogs questioning whether this was the right emphasis and debating whether independence really mattered."
Slocock said that the sector had now woken up to the importance of independence "partly because of the work of the panel and partly because the issues have become more acute". She said: "I think the sector is a lot more alert than it was four years ago – the question now is what it’s going to do about it."