Rob Blackhurst

The Liberal

Autumn 2005

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New Labour may have lost interest in controlling the commanding heights of the economy from Whitehall, but when it comes to Britain's charities, the spirit of Nye Bevan lives on. Labour has achieved something far more audacious than acquiring rusting shipyards or bailing out British Leyland: they have nationalized civil society.

Last year the state became the biggest funder of Britain's charities, accounting for 37% of their income. This is far more than they received from either voluntary contributions or corporate donations. Most of this windfall comes from running public services previously in the hands of local authorities. Charities now have service contracts worth 2.5 billion pounds a year to do everything from wiping the bottoms of the elderly, looking after children in care to supplying digital hearing aids.

This is a mutually convenient deal. As Gordon Brown himself says: " volunteers and local community workers, at the coal face, are far better positioned than ever a government official could be, both to see a problem and to define effective action". More importantly, they give the Treasury a welfare state on the cheap. Funding charities cost far less than directly employing public sector workers with their generous pensions and holiday pay. And charities are ecstatic at this new land of plenty. They've transformed in a decade from the doughty voluntarism of the cake stall to a world of fat consultancy fees and sharp-suited salaries.

But the danger is that charities are enjoying themselves so much inside Labour's big tent that they've forgotten why they entered in the first place. This marriage of convenience seems to be making some charities supine - unwilling to threaten the monthly cheques that have allowed them to realize their dreams. They've toned down their criticism of government – particularly at election time- and committed themselves to an "inside track" strategy. Instead of trying to influence public opinion they now try and wield direct influence on the tacit understanding that they won't embarrass their paymasters. No surprise, then, that the National Council for Voluntary Organisations warns "there is a feeling in some quarters that the Government is at best co-opting the sector and at worst neutering it"

The clearest evidence of de-fanging comes from the environmental charities. When Labour came into power, their gilded promises of "sustainable communities", an end to "predict and provide" in roadbuilding, and a renaissance in public transport, had Friends of the Earth and Greenpeace flush with excitement. After the wintry years of Conservative rule – where environmentalists were seen as the unwashed siblings of Swampy – they suddenly found themselves on Ministerial mailing lists.

They were asked to take part in "stakeholder" meetings, "public sector" steering groups and submitted forests worth of submissions to "policy consultations". Even Jonathan Porritt, the fearless environmental campaigner, took a position as head of the Government's Sustainable Development Commission and, in that capacity, was prevented from making "political remarks" during the election campaign. The Government reaped in the rewards of this charm offensive. They luxuriated in environmental praise after committing themselves to a purely symbolic promise to drastically cut carbon emissions by 2050 – long after today's cabinet will be dead. Now that it is clear that, in fact, the Government are going to miss their Kyoto reduction targets and renewable power targets by a mile, environmental charities could be organizing massive street demonstrations and public pressure on the Government. Instead, as the Sunday Times Environment Editor Jonathan Leake has written: "in just eight years one of the movements in British politics has become marginalized and impotent"

There have been reports (strongly denied by Government) from housing charities that civil servants made it clear that they expected those receiving government funds to tow the Government line. One long-term observer of charities thinks there has been a change: "The housing sector have become far less radical. There is a pool of people coming out of the Labour party – often Heads of Housing in Local Authorities – that go straight into charities. No wonder they're reluctant to criticise". And elsewhere there are similar suspicions. When the Home Office launched "Talk to Frank" – its drugs advice website for teenagers – the major drugs charities (all recipients of Government largesse) praised it apart from Transform (who don't take Government money).

It is, as the Baring Foundation has pointed out, "hard to identify any organisations actually losing funding as a result of criticizing either policy or programmes". More likely is the risk that charities will censor themselves, fearing that next year's funding application will meet Whitehall displeasure if they are too outspoken. Perhaps, though, the biggest threat to civil society is more mundane. Our charities, sated by secure Government funding could fall into sleepy oblivion. Up to the elbows in the state's housework, thinking about the next contract, they simply won't find the time or energy to raise their placards.

Rob Blackhurst is writer on public policy

robblackhurst@hotmail.com