Yet another Big Society relaunch

David Cameron’s Big Society idea, re-launched yet again today with Big Society Capital, has been widely lampooned ever since its creation. Its apparent promise of flourishing charities and community groups has not materialised.

The Big Society was instead clearly designed to deal with the difficult political legacy of Margaret Thatcher’s infamous “There is no such thing as society” line and to provide political cover for the deep cuts in funding to local and national government which David Cameron and George Osborne are pushing through.

National Council Voluntary Organisations Chief Executive Sir Stuart Etherington has talked of “a perfect storm” of cuts and rising costs creating a toxic mix of circumstances for charities with increased demand for their services, growing financial pressures and an unprecedented fall in income.

Strikingly charities have been disproportionately targeted for cuts. The now notorious Conservative-led Nottinghamshire County Council is seeing its funding cut by 8% yet has cut funding to the county’s charities by 34%. Even the flagship Big Society charity MyGeneration run by Big Society Ambassador Shaun Bailey has had to close “due to lack of funds”.

In a secret report for the Cabinet Office leaked last month an analysis of bids to the Transition fund found that charities and community organisations are set to have lost at least £1billion and possibly as much as £5.5billion this year; as a direct result of government cuts.

Two thirds of the charities most desperate for help to keep services going were in the 25 most deprived areas while charities helping the unemployed back into work were facing an average 50% cut in their funding. Indeed community and voluntary groups in the 20 poorest areas of England lost 40 times as much funding as those in the richest 20 districts.

The changes to tax relief for charitable donations signalled in the Budget are set to cause further uncertainty and financial problems for charities.

As the scale of government funding cuts has become clear, so ministers have talked up the opportunities for charities to win contracts to provide government services. In reality it appears that many charities are not able to compete on a level playing field with bigger private sector businesses able to take on more risk when they bid for the same contracts.

The Work Programme once tipped to offer charities more work in helping the unemployed get back to work has not delivered anything like the level of referrals ministers once promised and charities are beginning to pull out highlighting the frustrations and cost of a Programme that isn’t working for them or for many unemployed people.

With the launch of Big Society Capital, a continuation of Labour’s policy to create what we called the Social Investment Wholesale Bank, there is a danger that this relatively small amount of money is being oversold as a magic bullet that will solve the huge funding problems facing charities and voluntary organisations up and down the country.

By the time of the next election it is clear there will have been further major reductions in funding for charities, that local government will not have the financial muscle to help local groups in the way it once did and that most major government contracts will see at best a secondary role for the charities sector; – not as prime contractors but more as subcontractors.

As Ed Miliband has recognised, for too many people the universal ambition to live in strong communities in a nice neighbourhood feels ever more distant.

Charities will undoubtedly have to have a bigger role to play in helping local services become more flexible and responsive. If we want to strengthen the resilience of communities in places as diverse as Hackney and Witney then we will need to find new ways to finance more charity-led community and social action, we will need to engage business more systematically and encourage more individual enthusiasm for community service than before.

The scale of the cuts in government funding, a series of poor commissioning decisions and the collapse of trust in David Cameron’s Big Society brand have all made this task far harder.

Gareth Thomas MP is the Shadow Minister for Civil Society