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How do I “volunteer” this opinion?

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Some South Tyneside “charities” are little more than job protection schemes.

First of all I have not enjoyed having to pick on one particular South Shields based “charity” for this article, it was just that the numbers were of such a great magnitude that it was too difficult to ignore, it is among a clutch of organisations properly registered as charities with The Charities Commission. As we face times of economic restraint and much tighter control of public spending, the state and its various organs, including councils such as ours in South Tyneside, are under enormous pressure to produce savings and reduce the amount of taxpayers cash that they spend. Only in this way will there be any future prospect of us being able to keep a little of our hard earned cash for ourselves.

However there are many charities which receive more than 10% of their income from the tax payer in one form or another, a threshold which ensures that they perennially plead for greater protection and greater funding without having to hand out the buckets in the street or post huge plastic bags through our letterboxes. If you would like to learn a little more about “fake charities” then read on here.

So, as the Prime Minister likes to remind us “we are all in this together” and the third sector is part of “the Big Society”, but that should not preclude many organisations listed at the Charities Commission from scrutiny or a necessary reduction in public funding, particularly if the output that they offer is little more than “public services by proxy”.

Of the South Tyneside registered charities that I looked at, the South Tyneside Council for Voluntary Service caught my eye, mainly because of the eye watering amounts of public finance that it consumes, and the very low amount of genuine public donations that it receives, in my view if a “charity” cannot raise a sufficient funding for itself directly from the public then that could indicate that we do not necessarily support its objectives and aims. the South Tyneside CVS submitted its latest balance sheet to the Charities commission in November of last year, you can download it in .pdf form here.

In the year ended March 2010 it had a total income of almost £1m (991,580), of that income only £1013 came from general donations, fund raising or sponsorship, i.e. this is what the average Joe in the street knowingly and deliberately gave them. Their income resources from charitable activity amounted to £854,117, and a further £136,450 came from activities for generating funds. From their income South Tyneside CVS expended £981,401 including staff costs of £653,813, and this for a head count of only 35! They state that their principle sources of income are South Tyneside Council, South Tyneside Primary Care Trust, Capacity Builders ( a publicly financed organisation), The Big Lottery Fund, and South Tyneside Council Area Based Grants. Clearly, this small group of people rely almost exclusively on the tax payer for their jobs and livelihoods.

Furthermore of the £981,401 that it spent, only £53,000 was passed to partner organisations and other groups in the form of grants.

So the cash rolls in from the public coffers and it rolls out mainly in the form of wage costs, but for what and for whom? Wage costs for 35 people suggest an average of around £18000 per head, but some of those listed are part time, and others are in more senior managerial positions, so some latitude ought to be assumed. The largest wage costs are attached to the Health Trainers, those good people who work in the community telling us what we ought to eat, what we ought not to drink or smoke, how and why we ought to exercise, what substances we ought to stop abusing our bodies with etc. etc. All well and good, very acceptable advice, but shouldn’t South Tyneside Primary Health Care Trust be shouldering the costs directly? Instead, they appear to channel money out of their own budgets to South Tyneside CVS and ask them to administer the wage for these trainers, what comes in then goes out, and whatever savings the CVS achieve they are able to keep for themselves, a very adept means of protecting health service workers!

The CVS managed to make savings of around £10,000 in the reporting year which it keeps to add to its rolling reserve to achieve the required 13 weeks worth of working capital, and from what I can glean from this report we have a mass of cash being recycled from a variety of tax funded sources to help pay for services that ought to have been directly supplied by the grant providers originally. This looks like a convenient way of hiding some of our public services from view and effectively protecting them from scrutiny or the effects of government directed cash savings.

It also provides work for charitable groups to administer the wages and associated costs of these services on a very long term and secure basis, the director of CVS, for instance, has been in post for around 26 years. She must be extremely good at the job and highly valued, it would be difficult to find a director or chief executive of a public limited company holding down such a prestigious position for so long.

It is easier to understand now why public relations drives in the local press appear year after year after year during that six month or so period when councils and other bodies are preparing their annual budgets, although sometimes they garner the type of publicity which is not always welcome.

South Tyneside CVS is not alone in living off the public purse, Bliss=Ability, the Laygate based charity which provides an information service for people with disabilities is also registered at the Charities Commission, although it is diversifying and one arm is now a small company. However in its last accounts submitted in September 2009 (.pdf here) they reported an income of £424,000 of which only £801 was voluntarily donated! Becuase of the greater diversity in their activities they were able to find funding from a more diverse range of public sources including South Tyneside Council’s Social Care and Health Advocacy Service, Links (a publicly funded local networking service), the Carers Support Team, the Coalfield Regeneration Trust, Social Enterprise Europe Consensus Development, Community Health and Development, and a Big Lottery Healthy Living fund. Once again a charity that survives on tax payers cash and paid out over £300,000 of its income on staff costs.

South Tyneside Training and Enterprise Network Ltd is another “small company” also registered as a charity with the Charities Commission (last balance sheet .pdf here), who from a total income of £162,300 had voluntary donations of around £5000, mainly from the Yorkshire Bank, the vast majority of the remainder of their funding was also provided in one way or another by the tax payer. They receive grant aid to assist them in finding work for the unemployed. Unfortunately they tend to spend far more than they receive and in 2010 their payroll costs of £309,462 exceeded their income. Unlike many private enterprises who would have folded without further investment, TENS see themselves as a going concern, and the government will see a need for their services to continue.

Groundwork South Tyneside and Newcastle upon Tyne had a total income of £2.88m of which only £36,000 was voluntarily donated, they are profitable and spent only around £200,000 on staff costs, they intend to build high quality “carbon neutral” homes on a site in Reed Street, South Shields.

The point that I am trying to make here is that their charitable status is not determined by the amount of voluntary donations by you and I, but by the largesse of the public purse, and if “we are all in this together” then we have to weigh up the balance between costs and value. We often hear the argument that someone may know the cost of everything but the value of nothing, but it is my belief that many of the projects being pursued by these charities were at some point in the past within the remit of a public organisation directly responsible to a minister, or council responsible to its electors. Over the course of time these functions have been farmed out to pretty much trustees who are now charged with administering public funds by proxy. As such, I see no reason why the organisations who are granting the funding to these charities should not take a long hard look at who they are giving our money too, how much value we get for it, and determine whether or not the services offered could be provided either in the private sector or at the direct cost of the public sector openly and honestly without hiding costs in another organisation.

As things stand, we have thousands of “fake charities”  suckling at the tit of the public purse, spending a small fortune providing jobs for themselves, unaccountable to electors and in many cases set up without public consultation or involvement.

Update 20:50

Just as I’m talking about hiding public services away behind a “charity” cover and protecting jobs, what do I find? It must have been a premonition!

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Written by curly

March 9, 2011 at 2:59 pm

20 Responses

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  1. Surely this is the Tory Big Society in action? State functions run by the third sector, where blame and accountability rarely rests. Essentially PFI and PPP, but with the added sweetener of a charitable tax status.

    Last year I recall you pounded the streets of South Shields to sell us the Tory dream, when all along it was already in full bloom in South Tyneside.


    March 10, 2011 at 4:51 pm

    • Nice little dig Brian, but David Cameron didn’t officially launch his “Big Society” ideas until after the election, 19th. July to be precise. I don’t recall anyone attaching any great significance to the ideas during the election campaign in South Shields either, it just wasn’t a topic that was high on the priority list on the doorsteps.


      March 10, 2011 at 7:42 pm

      • Curly, the Big Society was part of the Tory 2010 manifesto. Whether you considered it to be a big issue or not is neither here nor there – you campaigned for a manifesto which outlined the Big Society as an initiative to offload state functions onto charities – which you’re now disagreeing with.


        March 11, 2011 at 8:09 am

      • Brian’s points are well made. Cameron claims that when he ran for the leadership he floated the BS idea. Problem is that the voluntary sector can be bureaucratic and paralysed by stultifying procedures;a point that is conveniently forgoten about by Cam and his millionaire cohorts.


        March 11, 2011 at 8:26 am

  2. Curly I hope you don’t decide to wrap up your blog. This current post was very enlightening and interesting.


    March 10, 2011 at 8:06 pm

  3. Interesting to read some of the comments on the site; wonder when the first defamation case will result, with the lawyers enjoying a big, non charitable pay day. Look out for a recently published book entitled “The Big Society” penned by a Tory MP. Even Tory Councillors (not STyne) think that the idea is naive, according to anecdotes that I have heard.As regards proposals revealed by “Gazette”; only by looking at examples of best practice elsewhere can LA’s economise and find cheaper, more efficient ways of delivering services.


    March 11, 2011 at 8:13 am

  4. Ironically, “reducing the tax take” could result in people and businesses having to make considerable annual payments of fees far exceeding the “tax take” in order to pay for services previously available free at point of delivery.


    March 11, 2011 at 8:17 am

  5. I would have thought that the Conservatives would have supported the CVS, an organisation that takes charitable status and as a result receives a financial incentive. There are several points; firstly, there are many quasi-official bodies that are charities yet have the ability to act in an official capacity either by prosecuting people or ordering them to do something, the NSPCC, RSPCA, the RNLI. Without charitable status these would go under, would we want them to go under because the public does not contribute to them or prefers to donate to other charities? Further, the CVS provides a wealth of information needed by charities as well as services and training that are required, how do you go about setting up a charity? What are your legal requirements? How do you do accounting? What training is available? What are your insurance commitments? What facilities can you offer me? The CVS not only recruits people as volunteers but provides a service for all of these charities, saving them money. They also act as a conduit for central government influence within the charitable sector and assist local government in both organisation issues and governance issues. They have a wealth of expertise, and whilst I’m not sure how many charities and people they support in the borough, I do know it will be immense. Should all the charities have to rely solely on the input of public donations I suggest that animal welfare would be best met whilst other less emotive charities would struggle? CVS offers an excellent service at a very reasonable cost. If we want to encourage community involvement, community cohesion via charitable or voluntary groups, someone has to provide professional support. There is a bigger picture here than your blog would suggest.


    March 11, 2011 at 8:27 am

  6. I think some of you are starting to see the picture that I am attempting to paint here, in that the perceptions of Cameron’s “Big Society” are rather way off target, and that the charitable function that we imagine is in reality just a side stepping of government or quasi non governmental functions taken off the public accountability.


    March 11, 2011 at 11:47 am

  7. Kevin your argument is nonsense, if half of the charities you talk about lost there status they’d be taken inn by the state, they are almost fully funded by the tax payer in any case, just hidden off the books as Curly says.
    Do you really think that charities like the BHF, Oxfam, Age Concern, Scope, Mind, etc need someone to find volunteers for them and train them. If I wanted to volunteer to work in a charity shop in King Street do you think it wouldn’t happen if one charity wasn’t there to give the training and advise? no, your wrong and those charities would still operate without an extra layer of hidden state funding and red tape.
    Im glad the council has had second thoughts about hiding leisure services behind a charity trust fund.
    If it happened how do you think council policy would operate on assets held by another body.

    Bill Payer

    March 13, 2011 at 9:13 am

    • Hello Bill, you are of course correct to assume that large charities have their own HR, training and financial structures, but you would be very surprised at how much they rely on both central, local and external funding. I used to work for such a charity, and I can assure you that they are currently having to scale down their activities at the ‘pointy end’ as well as in the administrative area to ensure that they can assist those most in need. The reason being two fold; less money coming in, and the fact that increasing overheads is having an impact. My response to Curly was initially due to his blog of 4 March, ‘When is a charity not a charity?’ Both you and LLB make good points. Are these charities or are they functions we can do without? A good example can be cited of where a charity became a public body the Probation Service, it could even be argued that in history, government established quasi-legal remits for charity, e.g. the poor law. Philosophically Curly raises the question but ruins the debate by introducing the question of people dipping in their pockets as a measure of charitable worth. We must not forget that, whilst there are large charities, the CVS does aim to help the smaller community groups, charities, educational routes etc. Curly is right to raise the issue, but be assured this is a larger issue and that these charities will have to shrink as their budgets are cut, and this will lead to people who need help being neglected and the community losing out. You need simply look at some of the recent cutbacks in our area such as with Age Concern, Victim Support believe me this will lead to hardship for those less fortunate than ourselves. If we as a ‘caring’ community feel that this is acceptable so be it.


      March 13, 2011 at 9:42 am

    • I don’t want to get into an argument but saying that important charities would not go under they would simply be taken ‘in’ by the state. Just read the Shields gazette today 28th March and I see that South Tyneside CAB have placed all of their workers on notice of redundancy. Clearly even the largest of the charities will be affected by cuts.


      March 28, 2011 at 1:48 pm

      • Yes, but as I outlined in my post this is the time of year when we will see these stories. The CAB’s financial accounts make interesting reading don’t you think, half of the management committee are serving councillors or previous candidates, total income was up by 2.5X and expenditure was also doubled, the largest increase in expenditure being over £600000 on wages and salaries!
        Yet they are carrying more than £1/4m worth of reserves and issuing redundancy notices?
        Another closer look at the Gazette story reveals that Vince Cable’s department has agreed “at the eleventh hour” to continue being the major funder of the service, but they are due to receive a slightly smaller grant?
        Perhaps he’s seen the accounts.


        March 28, 2011 at 4:12 pm

  8. Ironically there must be many members of the public who would unequivocally support total government funding for Air Ambulance, Lifeboats and organisations combating cruelty to children and animals.


    March 13, 2011 at 9:19 am

  9. As a preliminary to what I’d like to add to the topic of local charitable organisations, I do hope that you continue with the Corner Shop Blog, which I regularly read and find for the most part stimulating and, although somewhat partisan on occasions, shows a generosity of spirit and tolerance that is to your credit.

    I write as someone who has served as a trustee on the management committees of five local charities during my employment with South Tyneside Council. Having more than thirty years of involvement with local government and charitable/voluntary organisations I encountered most of the operational matters and management committee concerns together with funder/provider issues that involvement in such bodies necessarily entails.

    First, although the activities of voluntary organisations and charitable bodies predates the burgeoning growth of the state at local, regional and national level, it is the case that the heyday of philanthropic giving ended more than less with the advent of the 20th Century. From that time on the state at local and national level has permeated voluntary and charitable organisations such that many stand in sub-contractual relationship, given the formers’ financial input to the Third Sector.

    Second, I suspect that most of those contributing to your ‘How do I “volunteer” this opinion?’ entry would not wish to see the municipalisation or state absorption of charities and voluntary organisations, as such would be an unacceptable, Kremlin-like encroachment on civil society.

    Third, it should be noted that during the last fifteen years, many voluntary organisations sought charitable status, not only because of VAT and Rates relief, but because under New Labour grant giving bodies were exhorted to favour the funding of charities as part of an envisaged voluntary sector expansion.

    Fourth, despite notions such as “trickle down”, the reality is of too many charities chasing too little funding and that for many – and for a variety of reasons – financial support from private donors is not forthcoming. Locally, the reality is that but for financial support provided by the Council, some registered charities would face closure. This in turn raises the issue of local authority funding criteria and transparency.

    Fifth, for some of those employed in hard-pressed charities the time-consuming work involved in fund-raising can detract from the core function of providing help and support to the public.

    Sixth, the appellation “fake charity” is not very helpful given the limited, 19th Century, criteria applied in its use – and it is of no help in assessing the effectiveness of given charities. Two local examples may suffice: the Boldon Lane & Hebburn Neighbourhood Advice Centres are heavily reliant on Council funding, but the benefits they generate for their users are exponential in contrast. It would be terrific if some wealthy benefactors supplied secure and adequate funding for such projects, but in the absence of that (and that it would be unreasonable to expect their users, most of whom are on benefit, to donate) they justifiably continue to rely on Council funding for the important services they provide.

    The issues you raise are important because they lead to questions about some of the assumptions underpinning community development/community engagement strategies. The question may be posed: how are local councils to foster greater community involvement in the voluntary sector when people are largely apathetic to local government itself? Further, how have the experiments in community development and engagement with charities and the voluntary sector fared?

    Across the voluntary sector one can find instances of management committees meeting infrequently; of workers having de facto control of the running of some charities and voluntary organisations, of management committees serving more as a support group (a “fan club” is the usual disparagement) than a properly functioning and representative employer. The very nature of the voluntary sector helps screen such bodies from public scrutiny. Generally, pension and salary arrangements are inferior to those of public sector employees: a reason why outsourcing public services is so attractive to some. Further, the claimed independence of the voluntary sector is in most cases illusory, given the amount of central and local government funding they receive. In short, as those contributing to your Blog have recognised, there are some examples of well run charities doing important work, but there are others whose ability to attract funding is a cause of bewilderment.

    Perhaps the difficulties in recruiting a wider spread of people to serve on management committees or to volunteer, is that a lot of folk appear to show the same apathy toward voluntary activity as they do to local government elections. Contrarily, however, there are probably hundreds of people in South Tyneside who would leap at the chance to “get involved” were they able to do so. They are the legions of carers, who save the state £Billions, unable to take part in such activities because of caring responsibilities.

    As someone employed by a voluntary organisation for six+ years, I can contrast the degree of oversight and accountability involved in that with my employment with STC. Frankly, there is no comparison: employed by the Council I was fully accountable to Council Members (of all stripes), to Council Officers and to the general public. In the voluntary sector I had an altogether freer hand, while gratefully receiving tax payer subventions. Moreover, if anything, under New Labour local government was for a time subject to over-intrusive scrutiny.

    Overall, I agree with your correspondent “Brian” as to PPPs and PFIs and the risks of outsourcing local government services – often a precursor to shoddy services and inferior terms and conditions of employment for those providing them, as well as a reduction in accountability. Pulsing at the heart of Neo-Liberal thinking is, arguably, the elevation of the consumer over democratic citizenship, where, with the state in retreat, those on the lowest incomes are much more likely to go to the wall in the envisaged, unrestricted, rapidly expanding and ‘open’ market place.

    Justified criticism of inflated Chief Officer salaries (the product of lax Council Member scrutiny and mimicry of the City) ought not to detract from a recognition that the worst system of openness and democratic accountability is offered by the services provided by local government, except for all other systems. People such as yourself help to make sure that the Council and its Members are held to account.

    The concerns you raise are timely and pertinent, as local councils may be pushed into divesting themselves of services, handing them over to non-accountable or quasi-public bodies. It is right to ask questions about the management, accountability, achievements and value for money of such organisational contrivances. The same goes for charities and voluntary organisations benefiting from tax payer monies. Hallowed “Charitable” status should not be a barrier to asking the questions you posed. Let’s hope that the Council will be just as rigorous and as questioning in determining the grants to local voluntary organisations – and that it will publicly justify its approach to such funding decisions.

    Michael Peel

    March 15, 2011 at 8:58 pm

  10. Good point about level of accountabilty of LGO’s as opposed to those who work in voluntary sector.Problem for frontline local government workers is that instead of beingultimately accountable to a Chief Officer who is fully qualified in their specific professional discipline, they are “led” by “directors” who are paid around 4 times their salary, yet have no knowledge or professional training in their specialist discipline eg elevated ex town planners and highway engineers running directorates that include lawyers and regulatory staff.


    March 16, 2011 at 9:20 am

    • I concur with the point made by LLb. It has been my misfortune to see chief executives of charities being remote from the front line of their operators. They seem to be overpaid whilst most who work in a charity are underpaid, then they are carted in front of the media, the great and the good to await their gongs. This hides the fact that the majority of operators are skilled at their task usually to at least graduate level and work long hours in regimes that do not receive sufficient funding considering the economic benefits that they bring. Carers has already been mentioned, in Sunderland in a typical year Victim Support would generate £500,000 in compensation for crime victims, free of charge to the victim, this money is then spent or invested in the local economy (although will never make up for some of the horror they have suffered). The actual costs to run VS minimal.
      Another difficulty with charities that attempt to deliver a professional service is the reliance on volunteers. They are expensive to train, not always reliable and not subject to the contractual arrangements of an employee. Many are very good but others either volunteer to enhance their CV, or for other dubious reasons. Curly has engendered a good debate surrounding charities, but I feel he could have done so without the News of the World style of highlighting issues. I would invite him to open a debate on issues that are important to the current time such as the ‘north south divide’, ‘the difficulty of democratic decisions locally and nationally’ or even on a more general topic such as ‘Geordie culture’ the impact that modernism has had! I enjoy this blog when it is kept professional but detest extreme views or side swipes that detract from what can be achieved.


      March 16, 2011 at 11:32 am

  11. Let’s keep these constructive lines open, whether we agree, disagree or partially agree/disagree there is no need for the personal, and, in my opinion, potentially defamatory exchanges, published on some other blog sites.Perhaps other Councillors will follow in the blog steps of Cllr Elsom…


    March 16, 2011 at 12:26 pm

  12. I make no secret, at times about my own views, but much prefer this open style that invites and encourages discussion about issues rather than personalities. We all face tough times and will have tough decisions to make, either personally or communally. We will need to find some sort of agreeable forum that can help our politicians hear our voice and appreciate differing strands of opinion. It is difficult to achieve that when the screaming is at full volume and the buns are flying about.


    March 16, 2011 at 4:13 pm

  13. Blogs by people who have functioned in the real world of private, public and voluntary sector rather than in a virtual reality worldof wheeling and dealing are valuable contributions to this debate. As regards the dreadful situations in Japan; one wonders how prophetic the paintings of John Martin , currently being displayed at the Laing Gallery, were. MacMillan’s quote “events, dear boy,events” is so relevant; those awful, apocalyptic events in Japan will undoubtedly have widespread economic impact, even in South Shields.


    March 16, 2011 at 5:00 pm

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