Charity changes would put pounds 3.4bn in grants at risk: Anger over proposals to create service providers

CHARITIES would lose pounds 3.4bn in government grants and pounds 900m in tax relief under proposals revealed in a Home Office-sponsored report to abolish charities and divide them into service providers or campaigners.

Only charities which opted to become non-profit making service providers, competing for state contracts, would receive government money for carrying out the work.

Charities were in uproar after the report was published by the Home Office yesterday. Called Voluntary Action, it was produced after three years research largely funded by the Home Office, Scottish Office and Northern Ireland Office together with grants from the private and voluntary sector.

Under the revolutionary proposals charities would either work for the state, and thus lose their campaigning voice and ability to criticise government policy, or become crusaders for social change.

The service providers would lose government grants and tax relief but could apply to reclaim VAT or other taxes depending on an annual evaluation of their performance.

The campaigners would lose all tax concessions and government grants, and also be unregulated. The Charity Commission, established in 1853, would be abolished. Only service providers would be regulated by a new body.

Most charities which attended the launch of the report were angry and confused about how the proposals would work in practice. Most now act as service providers and also campaign to influence policy.

Charities which concentrate on research, such as the Imperial Cancer Research Fund, pointed out they did not fit into either category. The author, Barry Knight, admitted this was a grey area.

The report also suggests that independent schools should be stripped of charitable status.

Many questions at the press conference related to how the campaigning groups would be financed and to the loss of tax breaks. Mr Knight said: 'This report is not about money or about tax. It is about a vision. I am disappointed that all you people want to talk about is tax.'

The National Council for Voluntary Organisations said some of the recommendations were fundamentally flawed. 'The great strength of voluntary organisations is combining the provision of services and campaigning. This is vital to ensuring that the real problems and concerns of those in need are heard.'

The Royal Society for the Prevention of Cruelty to Animals, which receives no government grants, estimated the proposals would cost it pounds 2m in lost tax concessions. Jerry Lloyd, its director, said: 'In general the public want charities to speak out for their client groups. In our case we have a special responsibility because we are the voice of the voiceless.'

Oxfam's deputy director, John Whitaker, said: 'This is an insult to Oxfam's 30,000 volunteers who are among our fiercest guardians of efficiency. Oxfam manages both to provide a service to the poor overseas and to campaign on their behalf . . . the new service agencies would, in effect, be gagged.'

Leading article, page 17

(Table omitted)

Suggested Topics
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Hayley Williams performs with Paramore in New York
musicParamore singer says 'Steal Your Girl' is itself stolen from a New Found Glory hit
Sport
Ronaldinho signs the t-shirt of a pitch invader
footballProof they are getting bolder
News
peopleStella McCartney apologises over controversial Instagram picture
News
William Hague
people... when he called Hague the county's greatest
Voices
voicesBy the man who has
News
More than 90 years of car history are coming to an end with the abolition of the paper car-tax disc
newsThis and other facts you never knew about the paper circle - completely obsolete today
Arts and Entertainment
Ed Sheeran performs at his Amazon Front Row event on Tuesday 30 September
musicHe spotted PM at private gig
Sport
Arsene Wenger tried to sign Eden Hazard
footballAfter 18 years with Arsenal, here are 18 things he has still never done as the Gunners' manager
News
Floyd
newsFloyd 'Creeky' Creekmore still performed regularly to raise money for local hospitals
Extras
indybestKeep extra warm this year with our 10 best bedspreads
News
people'I’d rather have Fred and Rose West quote my characters on childcare'
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE: SThree: Real Staffing Group is seeking Traine...

Year 6 Teacher (interventions)

£120 - £140 per day: Randstad Education Leeds: We have an exciting opportunity...

PMLD Teacher

Competitive: Randstad Education Manchester: SEN Teacher urgently required for ...

Real Estate Solicitor 2+PQE - City

Highly Competitive Salary: Austen Lloyd: CITY - HIGH VALUE REAL ESTATE / RESID...

Day In a Page

Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
The magic of roundabouts

Lords of the rings

Just who are the Roundabout Appreciation Society?
Why do we like making lists?

Notes to self: Why do we like making lists?

Well it was good enough for Ancient Egyptians and Picasso...
Hong Kong protests: A good time to open a new restaurant?

A good time to open a new restaurant in Hong Kong?

As pro-democracy demonstrators hold firm, chef Rowley Leigh, who's in the city to open a new restaurant, says you couldn't hope to meet a nicer bunch
Paris Fashion Week: Karl Lagerfeld leads a feminist riot on 'Boulevard Chanel'

Paris Fashion Week

Lagerfeld leads a feminist riot on 'Boulevard Chanel'
Bruce Chatwin's Wales: One of the finest one-day walks in Britain

Simon Calder discovers Bruce Chatwin's Wales

One of the finest one-day walks you could hope for - in Britain
10 best children's nightwear

10 best children's nightwear

Make sure the kids stay cosy on cooler autumn nights in this selection of pjs, onesies and nighties
Manchester City vs Roma: Five things we learnt from City’s draw at the Etihad

Manchester City vs Roma

Five things we learnt from City’s Champions League draw at the Etihad
Martin Hardy: Mike Ashley must act now and end the Alan Pardew reign

Trouble on the Tyne

Ashley must act now and end Pardew's reign at Newcastle, says Martin Hardy
Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?