Editorial
In his acceptance speech at last month's Charity Awards...
...Michael Brophy compared Whitehall to Humpty Dumpty after his fall: the sector can’t allow him to get put back together again – at least not as he was… When the Bretton Woods system was collapsing in the early 1970s, it was the US economist Milton Friedman who observed it was officials’ belief ‘they can put Humpty Dumpty together again’. They were wrong.
With a record budget deficit of some £20bn being posted in May and the Chancellor’s full-year deficit likely to exceed the £175bn predicted in April’s Budget, Humpty is looking distinctly unwell – and recovery to full health seems a long way off. In the circumstances, the outright refusal of the Treasury to compensate charities that lost funds in the Icelandic banking crisis comes as no surprise.
Of course government support in the form of the package of measures announced earlier in the year is very welcome and it will be interesting to see what developments occur under the aegis of incoming OTS minister Angela Smith, who has just inherited the hot seat from Kevin Brennan. But the sector cannot be dependent on who is doing what in Westminster – although there is clearly scope for strengthening the financial regulatory regimes to improve the sector’s understanding of how it works and what the risks are.
The distinctions between the private, public and voluntary sectors are becoming much less clear, and the current chaos is forcing through a new order. As Lindsay Boswell puts it on page 34 of this issue, ‘as public service contracts dry up those charities that rely on them face three options; merge, go to the wall or seek another funding source’. Many charities have already cut their costs, re-examined their charitable objects and set up partnerships in their quest to continue provision of relevant services to their beneficiaries. There will come a point where there is nothing more to cut and further consolidation may not make sense for those providing unique and specialist support.
A recent article in The Times recalls Brophy’s vision eight years ago of a wider sector made up of ‘public benefit organisations’, including ‘social enterprises, co-operatives and mutuals’, predating the Charities Act 2006 and the Charity Commission’s determined approach to its interpretation. But if Gordon Brown offered him a Sugaresque Third Sector Zsar role, I bet he’d turn it down…
Author: Clarissa Dann
Clarissa Dann is the Editor of Caritas, Charity Funding Report and Codicil. Clarissa has a background in legal and professional publishing, as well as business journalism and holds an MBA from
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