Posted on 13th May 2010
When I was asked to write a short article reflecting on what the outcome of the general election means for the charity sector, I didn’t think I would still be waiting to hear what the outcome actually was while writing it. So it’s fair to say that there’s been some redrafting over the past 24 hours! We now have a new government, run by a Conservative-Liberal Democrat coalition. We know a little about key policies and Cabinet posts. But there’s a raft of policy we don’t yet know about, including the third sector. We don’t know whether it was even discussed during the haggling behind closed doors; whether Conservative policy will operate by default; whether there are any major compromises to be made.
So although we now know the outcome of the election, we don’t know a lot about what it means for charities and philanthropy.
Optimists say that charities will have more scope for influence in this new world, in which smaller parties and even individual MPs may hold sway. And that an influx of new MPs with charity backgrounds will bring greater understanding of the sector to Parliament. Both these claims may turn out to be true. Though as others suggest, coalition government might make it more difficult for charities to lobby constructively - more people to convince, less stable relationships and positions.
If we don’t know how the ‘new politics’ will alter relationships with charities, what can the manifestos tell us? The Liberal Democrats want to make giving easier. The Tories want to cultivate the Big Society. Given the ratio of signal to noise in all of this, it’s going to take a while to work out what might actually change, so let’s focus on what we do know.
The grim reality that charities are squaring up to is that the needs their work addresses are going to be magnified; the people they’re there to help are going to be worse off; and a lot of the progress they’ve made over recent years trying to tackle injustice and inequality is likely to be undone. There are going to be huge cuts to public services and welfare spending, and they’re coming soon.
If this all sounds like doom and gloom, I’m sorry, but I think the outlook’s pretty grim. And it’s a picture that’s deeply troubling to charity chief executives, who are driven by the needs their beneficiaries face and passionate about helping them. If public spending and the welfare state are going to retreat to levels last seen years ago, it’s charities beneficiaries who will be hit hardest.
All over the country, councils are already looking at what they can cut quickly and with the minimum public outcry. Discretionary spending will be first on the chopping block, and that includes a great deal of existing funding of charities. Central government spending will be next under scrutiny.
How will those cuts happen? I hope they’ll be properly thought through, based on real evidence of current needs and charities’ ability to deliver social impact and value for money. There will undoubtedly be political considerations too, but it seems hard to argue in these times of austerity that evidence of impact and cost-effectiveness won’t be prioritised.
I hope that evidence of impact is available when decisions need to be made, because in the absence of that data, decisions will be made based on cost instead. That could lead to saving the cheapest services rather than those that really make a difference to people’s lives. And I’m not talking about charities making a case for support based on evidence of need. Everyone will have a strong case there - needs will be increasing across the board.
So what does this election mean for charities? I hope it means that charity chief executives across the land are putting impact measurement, analysis and reporting pretty near the top of their list of priorities. And that foundations and philanthropists are preparing to provide extra funding for charities to gather the evidence they’ll need. I hope it means that politicians and civil servants are preparing to work through spending plans to focus on achieving the greatest possible social impact with the minimum spending. I hope it doesn’t mean cuts based on costs, knee-jerk reactions or political palatability. Or foundations and philanthropists simply being asked to pick up the bill for public spending cuts. But it’s too early to tell. The jury’s still out, much as it is on what new politics means in practice.
Tris Lumley is head of strategy at New Philanthropy Capital (NPC).
Read more by Tris at his NPC blog.
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