What devolution could mean for charities

  • Devolution is a hot political topic that charities should be aware of
  • Regionalising services could have a major impact on UK charities
  • We look at possible changes caused by devolution, and how being pro-active could benefit your charity

There’s no doubt that devolution is very much an option for the UK. Following the Scottish independence referendum, Scotland has been promised half of the VAT receipts raised north of the border, its own income tax rates, and the ability to make changes to its welfare system.

In England, meanwhile, George Osborne’s northern powerhouse plan has given Greater Manchester a £6bn health and social care budget and powers over transport, police and housing, and the government is now legislating to give other UK city regions similar powers.

So what does this mean for the charity sector? If Scotland is anything to go by, then devolution is a positive force.

Positive attitude

According to John Downie, director of public affairs at the Scottish Council for Voluntary Organisations (SCVO), the attitude of successive Scottish administrations towards the sector has been markedly more positive than that of Westminster ones.

He says that the current Scottish National Party government’s focus on participation and democratic renewal is combining with the personalisation of public services to give charities much greater involvement in policy development and delivery.

“Certainly what we hear from officials is that there is a strong steer from the first minister and deputy first minister to engage real people in policy development and engagement,” continues Downie.

“If you’re an organisation delivering services to a particular client group, then you’re a bridge between those people and the state, so there is a big opportunity for charities to act as a broker for people.”

Effects of localisation

South of the border, the SCVO’s English counterpart the National Council for Voluntary Organisations is also broadly positive about the changes.

“Most charities are small and local,” says head of policy and public services Ruth Driscoll. “If services are being commissioned at local level, they theoretically stand a better chance of winning those contracts.

“In Manchester, the agreement with NHS England has created some really important opportunities for charities to prevent problems that would cause big expenditure further down the line, as well as deliver services that are more tailored to the local community.”

She does, however, point out that this localisation of funding may have an adverse effect on some charities, including those that are devoted to rare medical conditions and may not have sufficient beneficiaries in a single area in order to secure local funding.

She also points out that domestic violence charities often need a national network so they can move women away from abusive partners: “The national grants have disappeared and instead women’s refuges are having to apply to their local authority, but the local authority is only interested in funding a refuge in its local area.”

Scale and complexity

David Forster, head of risk proposition at Zurich, is also taking a keen interest in English devolution. He warns that the new regional public-service commissioning system – comprising of engagement groups, regulatory bodies and consultation frameworks – is likely to be highly complex.

“It’s essential that charities understand what’s going on and how to be part of it. They need to be working with the partnership bodies that are redesigning public services in their locality, because otherwise the parade may go roaring by and they don’t actually get to join.”

He adds that while a more local approach to public service commissioning should help smaller charities, the new groups being created are still very large.

“If you look at the Greater Manchester Combined Authority, it is 10 local authorities amalgamated into one. Then there’s the proposed West Midlands authority, which will be even bigger – it will have a say over significant amounts of public expenditure.

“Given that larger organisations are often more comfortable with the bidding process, smaller charities may not benefit as much as we think.”

Future developments

As for the longer-term, it may be that devolution of government drives some quite profound changes in the charity sector.

Amy Brettell, head of charities and social organisations at Zurich explains: “If devolution takes off then national charities may find they need more regionally focused operating models, because different local authorities could need significantly different things.

“Furthermore, if an environment exists in Scotland where the government seems to be more supportive of the voluntary sector, might we even see a shift in where charities base themselves?”

With the new Conservative government championing localism and the SNP thriving north of the border, a major new devolution settlement appears likely.

Those charities that anticipate these changes and adapt to them will be the ones that benefit.

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