Office of the Third Sector Compact breach

In October, 32 small charitable organisations across England received notification that they would receive funding under a new initiative, the Campaign Research Programme (CRP). This initiative, overseen by the Office of the Third Sector (OTS), would strengthen the ability of these organisations to campaign and have their voice heard.

The organisations represent a diverse range of issues. Some are marginalised groups, and consider different equality issues, including disability, women’s rights, victims of sexual violence, and other communities. The CRP - which totalled £750 000 - was designed to give these groups greater ability to campaign.

Yet over two weeks ago, Angela Smith, Minister for the Third Sector, wrote to the 32 organisations informing them – without consultation or notice - that the allocated money was now being diverted to the Hardship Fund, a £16.7m pool of money designed to help struggling charities during the recession.

The impact on the groups has been considerable. Many had made significant progress towards delivering new activities which were dependent on this funding. Projects, community activities - and in some cases salaries – would now have to be abandoned. Significantly, those affected organisations are ironically too small to be eligible for the Hardship Fund the promised money will now be supporting.

The condemnation across the Sector was swift, with immediate calls for a reversal of the decision. Some speculated that it may have been made for political rather than financial reasons, highlighting that the current economic climate is neither new, nor a justification for the sudden withdrawal of promised funds. Further speculation wondered whether the beneficiaries of the CRP were perhaps too marginal; that funding them might encourage criticism from some of the more right-leaning critics of government.

Many of those condemning this decision highlighted that it was made in breach of the Compact – a set of principles which govern the relationship between government and the third sector – and which include providing three months notice if funding arrangements are changed, as well as promoting the importance of consultation if such decisions are taken. All government departments have signed up to the Compact, and it is championed across government by the Office of the Third Sector – the very body responsible for delivering the fund, and its subsequent withdrawal.

Despite such vocal criticism from the Sector, the Minister has remained silent on the issue, and two weeks on, no official statement has been issued by her to clarify why she made this decision.

This has not been for lack of effort; earlier this week, written questions were tabled by Tom Levitt MP, chair of the All Party Parliamentary Group for the Voluntary and Community Sector. In them, he requested information both about the decision, and about available funding to the voluntary and community sector. No response has been provided to date.

The Office of the Third Sector has recently published an Equalities Impact Assessment on this decision. In it, they state ‘The Cabinet Office and in particular the Minister for the Third Sector will carry ultimate responsibility for this decision’, and acknowledge that it ‘will face severe sector criticism’.

They are right to do so. The criticism has been vocal and continual, with case studies provided by the affected organisations highlighting the impact this decision has had, and many of them writing to the Minister.

Compact Voice – which represents the third sector on Compact issues – has called for an independent investigation into this matter. We have encouraged the OTS to invite an independent body to take this forward, in the hope that government will be able to offer assurances that such an action will not take place again.

In the meantime, the continued lack of response from the Minister remains alarming, with NCVO resorting to a request under the Freedom of Information Act to try and gain clarity.

While the sector rallies together to use such mechanisms to challenge and scrutinise the decision, little effort has been made to allay or even address the very genuine worry it is experiencing as a result. Some fear that this reflects the low esteem with which they and other organisations are held by government departments. Funding challenges remain a concern for charities, with many now wondering what else may be cut.

The OTS has stated of its own activities in the Equalities Impact Assessment that it should “continue to work across Government to promote the Compact”, a comment in opposition to the actions of its own Minister.

Two of the underlying principles of the Compact include accountability and transparency. The Minister now needs to demonstrate her commitment to these principles with an independent investigation into what went wrong.

In its own assessment, the OTS acknowledges the damage this decision has caused to relationships between government and the sector. The Sector needs to see demonstrable actions from government on how it will repair the damage, instead of being seemingly ignored in the hope that the significant impact this has had will go away. The Sector deserves better than the silence it is currently forced to endure.

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