24 Oct 2010

Charities must ‘end competition’ to overcome £5bn cuts

As charities face a £5bn cut in funding, the founder of The Big Issue tells Channel 4 News that charities must end their “terrible competition” for money, and work together.

John Bird, editor-in-chief and founder of The Big Issue magazine and charity, said that charities are all fiercely protecting their own budgets.

Mr Bird, who consulted Mr Cameron on his plans for the Big Society in the run-up to the general election, said that charities should be establishing specific departments dedicated to working together, rather than vying for the same donors.

“What needs to happen is the reform of the terrible competition,” he told Channel 4 News. “How the hell can they ever talk if they can’t get round a table?”. Mr Bird went on to list some well known charities which work on the same sector but “loathe” each other.

He said the exception to this was large scale disasters, such as Haiti, when charities can work well together. However, he added: “They are all pushing their names in front of the TV cameras even then”.

Charity Commission chairwoman Dame Suzi Leather warned earlier today government spending cuts could hit funding for charities that are providing key public services, hitting the poorest the hardest.

The cuts could see up to £5bn drained from charities, and undermine Prime Minister David Cameron’s Big Society, she told the BBC.

Mr Bird agreed that Dame Suzi is “quite right, lots of charities will be hit”. Many of the 160,000 organisations the Commission oversees provide key services for councils and rely on local authorities for funding. Sweeping cuts to local authority budgets across the country could “pull the rug” from under Mr Cameron’s Big Society idea, Dame Suzi said.

Mr Bird said the big picture, the idea behind his vision of a Big Society, is to scrub out duplication and promote pan-sector work.

Community danger
The head of the Association of Chief Executives of Voluntary Organisations told Channel 4 News' social affairs correspondent Victoria Macdonald that many communities would find themselves in dire straits because of the Government's spending cuts.

Stephen Bubb in a blog earlier this week had written: "One of the more reprehensible features of the recent debate on cuts has been the emergence of those who believe that the poor deserve to suffer. That welfare is going to scroungers, and people just need to get off their bums and get work."

Today he repeated this, saying: "What we face is the government withdrawing money, local councils withdrawing money, demand on our services going up yet no more people volunteering, no more people giving. This is a very dire prospect for many of our communities."

At the Margins at the Union Chapel in Islington, north London, today, homeless people began lining up outside more than an hour before the doors were opened for Sunday lunch. Inside, volunteers mashed potatoes and stirred stew in preparation.

In the past few weeks they have seen numbers reach more than 150 and that with the expected cuts they fear they will have to start turning people away.

The gravy train for charities has come to an end, he said, but the big question is not how to obtain money – but how to improve your service without money.

The Charities Commission said it had conducted four surveys that show charities are largely unwilling to collaborate.

A spokeswoman for the Commission told Channel 4 News: “We have sent out lots of guides on collaborating and merging, and we have polled charities on if they would be prepared to work together – however the ‘yes’ responses were low.”

She added: “You can’t force people to work together, but many could cut costs by sharing back office services, IT and accounting staff – or by sharing things such as mini buses.”

The sector will face a hard time in March, she said, when many contracts with local authorities are set to end. “In this case, charities could get together to bid for contracts,” she suggested.

Mr Bird meanwhile, plans to relaunch The Big Issue in the New Year focusing on people helping themselves. “We want people fighting for themselves” he said.

“We are concentrating on how to help people become recession proof…and how to prevent people becoming homeless,” he said.

Alongside the relaunch, Mr Bird is establishing a foundation next year to reward charities that work with each other. “We will also be exposing foundations which operate in the world by themselves,” he said.