A Trojan horse for the voluntary sector
The Scottish voluntary sector is in turbulent waters. On top of spreading funding problems and the threat of more ‘red tape’ costs from the Parliament’s Vulnerable Adults legislation comes the warning that Scottish organisations stand to lose £5lm if the London Olympics succeed in raiding the Lottery further. Then the news of the collapse of One Plus Scotland. Now Glasgow City Council has announced that it is planning to push ahead with plans, only revealed last September, to transfer its culture and leisure services to a charitable company by 1 April. Decision day for the Council is 2 February.
Glasgow has made clear that it is the services that will be transferred with the city’s outstanding cultural and leisure assets -worth hundreds of millions – remaining in the city’s ownership.
Some in the voluntary sector may welcome Glasgow’s move as testimony to the attractions of the voluntary sector model. With an annual budget of – ‘between £90-100rn and a workforce of 2500, Glasgow’s charity would immediately jump to the top of Scotland’s charity league by scale of operation.
But the sector should beware. Glasgow’s proposal carries real dangers for its reputation. The city’s cultural assets have been created by the generosity of generations of local benefactors, as well as the dedication and good judgement of the city’s curators. Whether or not the assets are technically part of Glasgow’s Common Good, as some of them almost certainly are in origin, the people of Glasgow have a direct interest in the ownership of the assets and how .they are managed. To transfer responsibility for running them without the fullest public consultation will earn the charity sector no credit at all. And if the trust then has to increase charges to the public or make staff redundant suspicions will fall on the charity sector.
The council’s plans project a saving from the creation of the charity of £7.5m for 2007/8 rising to more than £11m by 2010/11. But as its main income will be from a contract with the council it is difficult to see where the savings will come from. The council seems to put great store on savings in VAT liability. But councils already enjoy a privileged VAT position under finance legislation.
Another possible source of income for the charity is fundraising. Of course there is no barrier to the council running its own public fundraising on the lines of the Lord Provost’s fund for international aid or indeed its recent fundraising appeal for the Kelvingrove upgrading. Voices from Glasgow’s existing voluntary groups have already warned of the effects on their own prospects of a new giant charity joining the competition for funds. In practice few grant giving foundations are likely to favour appeals for grants for revenue support from an obvious council proxy.
But perhaps the most serious challenge to the voluntary sector is the harsh light that the creation of a Glasgow culture and leisure charity will throw on accountability to the public. As run by the council, Glasgow’s cultural and leisure services are subject to the full range of accountability, from public access to council and committee meetings to the direct election of councillors. As a charity Glasgow Culture would evade these forms of public accountability. Its accountability would be more limited, through contracts with the council- which would presumably be subject to commercial confidentiality -and the supervision of OSCR.
How far the voluntary sector in its public service role should be prepared to extend its public accountability deserves more debate. The sector would start from the principle of independence. Would Scotland’s new and largest charity start from the same principle?
Unfortunately the Scottish Charities Act places no limit on the number of trustees the council could appoint. It will be for OSCR to determine whether the governance structure provides sufficient assurance that the trust will be loyal to its charitable objectives or serve as a compliant proxy for the council.