Free Schools
The new ‘free schools’ scheme announced by Michael Gove is an example of what the Conservatives always said they would do – get the public sector to do more with less by passing the control over to communities.
As John Redwood (a Caritas contributor) put it recently: ‘We need new companies and established companies, charities and non-profit making trusts, to come forward to own and run schools and other public facilities…we need to create an atmosphere of “we can” rather than that only the government can.’
A new body called the New Schools Network has been funded to the tune of £500,000 to advise groups on how to set up schools and link groups to ‘education providers’.These include charities and private companies, who would create trusts to organise the day-to-day running of the schools. Let’s hope it doesn’t run out of money or get cut.
On the face of it, this sort of devolution is a huge opportunity for the charity sector. No more red tape and the freedom to make a dream happen. But there are some concerns about what appears as a ‘learn to swim by jumping in the deep end’ approach to the funding of ‘support’. NAVCA’s Neil Cleeveley observes: ‘When the state retreats from providing services the voluntary and community sector fills the gap…that’s why we need to know the government’s plans for the Big Society.’
It would appear that the heady days of Labour’s £42.5m Real Help for Communities: Charities, volunteers and Social Enterprises launched 18 months ago are long gone. This is the age of austerity. The £130m Grassroots Grants scheme finishes next April with no obvious replacement other than various forms of debt finance; the Big Society Bank should have its first funds available at around the same time. No surprise, given the size of the budget deficit, that government grants are being scaled back, but it is vital that the ‘hands off’ approach does not mean abdication of other forms of support.
A good start would be to accelerate the intent to ‘explore’ ways to improve the Gift Aid system and encourage charitable giving with voluntary sector representatives. There isn’t really time for too much more ‘exploring’ – why not just get on with it? And the 2.5 per cent hike in VAT, which the Charity Tax Group estimates will cost charities an estimated £143m year in VAT that they cannot reclaim, also needs some very swift attention. ‘Commitment’ to the third sector would surely extend to sorting out some kind of scheme with HMRC that removes the burden from those who can least absorb it?
At any rate, there is little doubt that charities will need to become much more open-minded about other forms of finance, such as venture philanthropy and social lending organisations. They will need to get nippier about how to attract and engage funders – and to deliver the returns. A bit like private enterprise really…which although inevitable is perhaps no bad thing.
Author: Clarissa Dann
Clarissa Dann was the editor of Caritas as well as an HR and management online service,he People Bulletin until July 2011.
She is now the editor of the specialist trade finance magazine, Trade and Forfaiting Review which can be viewed at www.tfreview.com but does write on charity finance and investment from time to time.
Clarissa has a background in legal and professional publishing, as well as business journalism and holds an MBA from
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