Milburn to unveil changes on charity funding
Patrick Wintour, chief political correspondent
Radical changes in funding for charities will allow improvement in services to the public over the next five years, Alan Milburn, the Labour election coordinator, will say today at a Guardian-sponsored event.
His speech, to be made at the launch of a Home Office-funded report by the Assoc iation of Chief Executives of Voluntary Organisations (Acevo) inquiry, will argue that charities and not-for-profit organisations are held back by problematic and wasteful contracts with government.
Ed Mayo, head of the National Consumer Council, who chaired Acevo’s commission, said yesterday: ‘The research has uncovered an archaic, deeply inefficient array of fund ing models, based on a spare-change mentality that stifles more effective action and leads to debilitating insecurity.’
The four main problems identified in the report are that ‘risk and uncertainty is badly managed, contract timescales are unrealistically short, bureaucracy is excessive and contracts are undervalued, so need to be subsidised by charities’.
As a result charities cannot plan effectively or deliver value for money. Short-term contracts create uncertainties that prevent charities from being able to retain staff and invest to improve services.
The report calls on government to stop exploiting charities through poor contracts. It demands a range of measures, so charities can deliver better services at better value.
It recommends establishing an independent ombudsman to identify, criticise and penalise parties for poor practice in contracting. The ombudsman should be able to conduct studies on areas of service delivery, investigate complaints, and act promptly, supported by an appeals mechanism.
It proposes an accreditation body to kitemark funders that conform with guidelines. The government should also devise an insurance premium or penalty scheme for contracts that fail to comply with the principles of surer funding.
It suggests the government should look at the sector’s borrowing requirements, exploring new models of long-term structured finance and learn from PFI/PPP models.
Stephen Bubb, chief executive officer of Acevo, said: ‘Public service delivery is a great opportunity for many charities to improve people’s lives. But important services can’t be run on hand-to-mouth funding.
‘We want contracts that mean better services for the public, not wasted money for taxpayers. That’s why we’ve devised a kitemark for organisations that fund better and an ombudsman to name and shame bad practice.’
Source: The Guardian