Election Outcome: What challenges and opportunities are on the horizon?

This article first appeared in Finance Focus published by Charity Finance Group, in July 2015.

The Big Society mood music of five years ago has largely disappeared, and there’s a perception that the election outcome is bad for the sector. We have recently seen increasingly hostile rhetoric from Conservative politicians about charity fundraising, regulation, and our influence in public debate. Scepticism in the sector is well-founded, but a number of opportunities have arisen:

Challenges

The Charities (Protection and Social Investment) Bill and would endow the Charity Commission with significantly wider discretionary powers, including one to disqualify people from acting as charity trustees and staff members if the Commission judges them to be ‘unfit’.  Meanwhile charitable assets are under threat from the new Housing Bill which could see the right to buy extended to housing association tenants, contradicting fundamental principles of charity law. Both pieces of legislation would set worrying precedents, altering the relationships between charity trustees and the regulator, potentially undermining the independence of charities.

The Cities and Local Government Devolution Bill would massively shake up how public services are delivered. This could benefit charities if they can forge working relationships with the ‘liberated’ local state. One ray of light is Greg Clark, the former Conservative Shadow Minister for the Third Sector, who now heads the Communities Department, who will oversee this agenda. Clark understands the sector even if his brief has moved on. The risk remains that government may use devolution to mask even greater decimation of local authority budgets with consequences for the local charity sector.

We are also likely to see more payment by results contracts and private sector contractors take on a bigger role in how key services are delivered. This will cause particular problems for smaller organisations: as will social investment and misguided attempts to address community needs through complicated loan-based finance.

Opportunities

The good news is that there are some new opportunities, if not the ones we expected:

The Party System

The election outcome has resulted in healthier looking, multi-party system with a narrow government majority – a more favourable place for anybody seeking policy change. The Lib Dems have cast off their shackles and returned to opposition. Labour, traditionally very open to the sector, remains a considerable force. We have a third, large opposition party – the SNP. Two of these parties are undergoing a period of self-reflection as they pick up the pieces. This is an opportunity for charities to work with the party system to promote their cause.

Lobbying

The government naturally has little desire to do anything but review the Lobbying Act. Pre-election, Labour MP Stephen Twigg, who has been re-elected, conducted a consultation with charities resulting in a manifesto pledge to repeal the Act. What went somewhat un-noticed is that the SNP manifesto contained some indication that they too might support repeal. Repealing the Act could find significant cross-party support and this is an opportunity to get this debate going again.

Funding

There’s a strong anti-austerity presence in parliament. The SNP will no doubt be an important player for charities seeking a reverse to the damaging cuts to local government and promote better ways of funding charities, such as grants. A huge amount of grant money could be injected straight into thousands of local charities if the government repaid the £425 million it owes the Big Lottery Fund, which was taken for the London Olympics.

Collaboration & Campaigning

What the election outcome means for charities is that it has never been more vital for us to work together, to share resources and knowledge, to campaign hard for our beneficiaries, and to defend the independence of our sector.