The “Voluntary” Sector Not the Best Answer

The “Voluntary” Sector

a need for reappraisal

by Angela Clifford

What should be our attitude to the voluntary sector? Many socialists would see the rise of ‘voluntary’ action as a consequence of the dismemberment of social services and a symptom of the general disintegration of the fabric of society over the past two decades. Others, however, like the idea of people doings things for themselves and for others in a decentralised kind of way. The general media attitude to ‘voluntary effort’ is to be supportive in an uncritical way.

One thing has become increasingly clear during this time: the word ‘voluntary’ itself has undergone a metamorphosis. It used to indicate that a service was provided altruistically. Nowadays the meaning bas been subtly extended to include professional service provided with the assistance of public funds. The whole field of ‘voluntary’ action can cover a multitude of activities, of varying use to society and with very different social relations governing them.

Because of the confusion surrounding the subject, it was with interest that I turned to Barry Knight’s recent report, “Voluntary Action“, which was commissioned by the Home Office and 22 other funders, including business and charities. I found that the 25 researchers involved in the project had produced a report with little in the way of hard facts on the profile of the voluntary sector in the UK. Indeed, one researcher – Genevieve Ready-Mulday – had produced more factual information in the few pages on the French “social economy” than the other 24 bad produced in the rest of the book. We learned that in France 1.5 million work in the social economy, with another two to four million helping on a voluntary basis, 70% of these being women. We also were told the turnover of the sector was FF 100 billion, with FF 60 billion concentrated in health and social service expenditure. Real conclusions could be drawn from this type of information.

When it came to the UK, however, a different methodology was used-one concentrating heavily on sociological methodology. Instead of facts, there were impressionistic ‘in-depth’ surveys of particular charities, their role, their workers, their mode of organisation etc., etc.-none of them named. What was

particularly frustrating was that a chapter which ‘analysed’ 1,173 national voluntary organisations, with 26 tables, did not provide objective facts, only relative facts. Thus, instead of telling us the total income of these organisations, the researcher told us the number and percentage of organisations in 14 income categories. The same procedure was used throughout. This greatly undermined its value as a tool for social analysis and change.

 

Whatever the shortcomings of “Voluntary Action”, it did make some interesting points – such as recommending the ending of the catch-all status of charities – and could have been the starting point of useful debate. John Major, however, has rushed in to close off discussion of change in order to further his current attempt to project a populist image, and Labour politicians have shown no willingness to grasp the nettle of cutting voluntary action down to size. It had been a tradition of the Labour movement to replace voluntary, charitable, individual provision of social services with statutory, generalised, and professional services, but little thought seems to be devoted to the new social revolution that is now required.

The first thing to note about the voluntary sector is that it is costly to society. Barry Knight does not make a lot of this point, but the fact is that any society registered as a charity may make whatever surplus it wishes without being subject to tax. And the Charity Commissioners ( or the Inland Revenue in Scotland and Northern Ireland) do not discriminate amongst applicants, so long as their general remit falls within the guidelines-i.e., as long as they are not overtly political or commercial. So wide is the scope of charitable endeavour that it can include Baroness Blackstone’s Institute For Public Policy Research, BUPA, private schools, and more esoteric institutions studying Zen Buddhism, Tolkien’s imagery or whatever. There are many different ways of organising a charity. Many of them are run by oligarchies who effectively ‘own’ them. While charities cannot pay dividends to their owners, or salaries to their directors, there is no limit on the fees, salaries and tangible benefits disbursed by charities. And, while there is often a top tier of voluntary figureheads with only a general idea of their project, the real management is conducted by a professional tier beneath them. Sometimes there is a further tier of voluntary foot-soldiers beneath the professional management, or there are paid employees, or a mixture of the two.

Donations to registered charities, if covenanted, attract a tax bonus. Thus, £10 of taxed income so donated will be worth £12.50 to the charity. An advert for the “Charities Aid Foundation” (Reader’s Digest, April 1993) also states “It will save you tax too”, but I don’t know how this works. Another device for attracting tax-free money is for a charity-which may not itself go beyond activity which directly furthers its objects-to set up a trading company which can engage in any activity. By covenanting company profits to the charity, the business avoids paying any tax. Naturally, tax-payers have to compensate for the taxes lost in these ways.

This point was high-lighted by Mr. Morison, a trustee of a charity, who recently wrote to the papers as a consequence of the publication of “Voluntary Action”. He said:

” … charity, properly speaking, is a personal and voluntary matter. Why then are we, as taxpayers, compelled to contribute to countless causes of which we know nothing and of some of which we may disapprove?

” … The. charity scene is getting out of control. Countless small organisations are becoming registered as charities With no other object other than getting tax relief .. ” (Letter to Financial Times, 19.10.1993.)

Mr. Morison thinks that in many cases the tax relief gained is small, and that the benefit of that is outweighed by the “onerous legal and administrative obligations” incurred. I am not in a position to comment on the total amount of tax lost lo the Treasury by the charitable benefits. It is not a figure that is cited by Barry Knight’s 309 page, A4 size printed report.

Another cost to society resulting from charitable status is in loss of Business Rate. A charity is only required to pay half the normal property tax-and this may be further remitted at the discretion of local authorities. Clearly, the shortfall income has to be made up by charging others more.

But the financial cost to society is not the main problem arising from ‘voluntary’ work. It is the disorganisation and personalisation of social welfare provision supplied by means of such institutions. Barry Knight shows that the areas of greatest need do not have the correspondingly greatest number of charities working there. The sort of area which produces volunteers is the sort with the least social problems. And there is an accidental element about where charities are located. The biggest single factor seems to be that an energetic person decides to do something about a problem and establishes either a new organisation or a branch of a national organisation. Another problem resulting from supplying services on a charitable basis is the discretionary element. After all Charity can never be a Right!

The socialist revolution of 1945 destroyed voluntary action in the UK for a generation to all intents and purposes. The Labour Government introduced the concept of “rights”, rather than “charity”; and those ‘rights’ were not the amorphous ones which come so readily to the lips of the under-employed these days. These were real “rights” corresponding to real contributions. The entire emphasis of Labour in those days was to promote the idea that social insurance involved specific payments made by workers in good times to ensure that they, their dependants and their class would be provided for when unemployed, sick, in the family way, or retired. This encouraged a non-sponging mentality, a sturdy independent outlook.

The Labour Front Bench has strayed close to abandoning that rationale for Social Insurance. It has tried to treat social contributions as just part of general taxation. That is a serious mistake. And it is one which plays into Tory hands. Mrs. Thatcher was elected on a policy of pushing back the state and reducing taxation. But Social Insurance is not taxation. It is a cost-effective and secure means of an individual providing for adversity. Privately-funded pensions and benefits cannot compare with the compulsory state-organised system, either in guaranteeing the amounts paid-or even if they will be paid at all (as Maxwell’s pensioners have learned to their cost). Such payments also depend on the vagaries of the Stock Market and cannot be depended on. They may be an acceptable addition to compulsory participation in state-organised Social Insurance, but not an alternative. But a proper social welfare system cuts out the need for a lot of ‘voluntary’ effort

Mrs. Thatcher was determined to revive the capitalist impulse in a society which had reached a socialist stalemate. Her chosen vehicle to wreck . public services was to extol the virtues of voluntary, private, and commercial action to replace public provision. A new role was given to ‘voluntary’ organisations, and an ideology of “active citizenship” and ‘charitable giving’ was promoted. There had been plenty of voluntary organisations before 1945, and they had performed important social functions. For instance, they owned many hospitals which provided subsidised medical care. The organisation of the NHS led to their demise and the public benefitted by having a statutory service giving a standardised high-quality (and free) health service across the country. The introduction of the Hospital Trusts is in many ways a return to the pre-1945 patchwork position-except this time around the Boards are paid salaries, instead of working for nothing.

The disintegration of Local Authorities has provided further opportunities for commercialised ‘voluntary’ enterprises. Municipal Socialism was one of Labour’s big strengths until the ideologues came to dominate thinking. Clearly, if there was going to be a cataclysmic egalitarian upheaval, the petty public services provided in particular localities were of little importance-indeed, they could hold things up by providing diversions. Municipal Socialism came under a two-pronged attack, ideologically and through the trade unions. Wages were increased and the public service ethic whittled away until many services became tenuous to say the least. Two oilier connected factors contributed to the general disruption. Firstly, there was me amalgamation of Councils into huge units around 1974 requiring new Town Halls to be built. large bureaucracies to accumulate, a general dissociation from localities by staff and councillors, and local achievements lost in one amorphous whole. Along with this there was the huge injection of finance into localities, leading Lo spendthrift attitudes only now painfully being curbed.

These developments made Local Authority ‘services’ an easy prey to Thatcherite attack. Voters saw no sign of Labour self-reform and anything seemed better to the self-serving. inefficient and spendthrift arrangements so wildly prevalent.

Many Local Authority services are now contracted out. And, while some have now been taken on by the commercial sector, others have been won by the ‘voluntary’ sector. some of which has become dependent on income derived from contractual arrangements with public bodies. There is a large variety in the ‘voluntary’ society undertaking such work. Some of them are religion-inspired and constitute a modern form of ‘souperism’. Others me philanthropic institutions characterised by superior career opportunities to those able to master sociological jargon. No doubt there are some genuine voluntary organisations out there too.

The worst of it all is that those personal social services which used to be provided in an organised, standardised and cost-efficient way by the NHS, have now been transferred to Local Authority administration by the Tories. These are now contracted out to a variety of providers to the detriment of those in need. labour politicians do not seem to have asked themselves why the Tories – whose concern over the last 14 years has been to reduce the powers and functions of local Authorities-have now given them this huge new role?

The fact is that sections of the NHS can be first disrupted and then given over to private enterprise by this means. And the commercialisation of the voluntary sector which has occurred in recent years helps to blur the distinction between private and public services. After all, as the advert says, nobody in BUPA makes a profit.

Barry Knight makes grand claims on behalf of “voluntary action” He sees it “as the expression of self in a free and democratic society in which people … have a right to belong, contribute, and be cared for if things go wrong for them. Ultimately, voluntary action is about relationships between fellow human beings. without environment, with other beings on the earth, and ultimately about our relationship with ourselves.”

The crucial point here is the emphasis on self-esteem. Thatcherism has made some people a lot better or by reducing taxes. Some of them feel bad about the resulting social problems and find charitable giving a useful (and sometimes pleasurable) way of easing their consciences. Naturally the donations are nothing like the amount they have saved in tax payments. But, unfortunately for the Thatcherite strategy, the new ideology has made people less inclined to give their labour free to charity. The decline in volunteers is highlighted in the Knight study. The enterprise culture means people feel they should be paid for their time, leading to the growth of professionalism and paid ‘volunteers’. People also prefer to give to ‘fun’ causes and in ‘fun’ ways. The Thatcherite revolution has !eel to an increased need for altruism while diminishing its supply!

Knight identifies another problem.  Many campaigning organisations have been diverted from their original remits into contracting for the performance of services for the state. This means that the original and the new roles are both indifferently performed. His solution is to do away with the idea of ‘charities’ as it presently exists-a phenomenon unique to the UK (and Ireland) within the EC. Instead, he suggests that campaigning organisations be no longer subsidised by the state in any shape or form (they can get funding from traditional private sources): and that they no longer perform services for the state. On the other hand, he proposes that other charities should turn themselves into agencies which will contract for and provide public services. These bodies will no longer be radical or campaigning, but professionally organised service-providers under strict regulation and with limits on pay and perks. These would exist alongside the overtly commercial sector as contractors for public services. Any tax-breaks they would be given would be related to performance.

There is a lot to recommend this approach as a temporary solution to the present chaos. The introduction of the National Lottery-with a fixed percentage of its income going to charity-would be a good opportunity to end the indiscriminate subsidy system presently in force. Knight’s solution is by no means an answer to the destruction of the socialised services. While it is hard to envisage the clock being turned back with regard to these (except for the NHS which Labour will hopefully restore to a universal system), there may be a pointer to the future for Local Authorities in certain Scottish developments, where the Tory enterprise culture (and funding) has been harnessed to community and cooperative projects. But to people such a development, we need a new generation of clown-to-earth socialists, able to rout the rainbow politics of the sociologists.

 

This article appeared in January 1994, in Issue 39 of Labour and Trade Union Review, now Labour Affairs.  You can find more from the era at https://labouraffairsmagazine.com/very-old-issues-images/ and https://labouraffairsmagazine.com/very-old-issues-images/m-articles-by-topic/.