Charity sector leaders have welcomed MPs' recognition of the problems with the Big Society agenda, stating they are largely concerns that they have raised themselves.
Today's Public Administration Select Committee report, which analyses the Big Society, found that the agenda is not doing enough to help smaller charities, is confusing for the public, and without a clear implementation plan and cultural shift in Whitehall it will be defeated with "inertia".
Sir Stephen Bubb, chief executive of Acevo, who gave oral evidence to the Committee earlier this year, welcomed the report’s concerns about the funding gap caused by public spending cuts:
"This cross-party report by MPs confirms what we all knew: that ill-advised cuts to the voluntary sector risk undermining the Big Society,” he said.
Sir Stuart Etherington, chief executive of NCVO, who also gave evidence to the Committee, said it was good the report highlighted concerns for smaller charities involved in public service delivery:
"The report highlights the unintended consequences of the government’s public service reform agenda,” he said. “The Work Programme shows that many smaller, more innovative, more local providers are being driven out. In tough times, government must make it easier and not harder to gain access to these new opportunities.”
Chief executive of Navca, Kevin Curley, welcomed the report's focus on small charities: “I really appreciated the opportunity give evidence to the Committee and try to explain what was needed to support local voluntary action. I am gratified that the Committee have listened to my evidence and have come out so strongly with recommendations to help the ‘little society’.
“They have understood the problems local charities and voluntary organisations face with the commissioning agenda, particularly with the Work Programme. This report supports the arguments Navca has been making for the last 18 months. If the Big Society is to succeed the government must act in support of ‘little society’. That means commissioning policies need to help local organisations, not just the big nationals.”
Irrecoverable VAT
Elsewhere, the Charity Tax Group welcomed the proposal for government to extend the eligibility for the VAT refund scheme which currently applies for public sector bodies, to charities that deliver public services.
The report states that this recommendation should be considered as a pre-budget representation addressed to the Chancellor of the Exchequer for implementation in the 2012 Budget.
John Hemming, Charity Tax Group (CTG) chair, welcomed the recognition of VAT as a barrier for charities providing key public services, something CTG has been seeking for many years.
The report acknowledged Charity Tax Group research from February 2011 - the Charity Tax Map - which revealed that charities were paying between £2.7bn and £3.7bn a year in tax.
It went on to say that the two main taxes paid by charities are National Insurance for employers, which makes up 54 per cent of their tax liability, and VAT, which makes up 37.5 per cent.
It stated that one of the stumbling blocks to charities delivering public services is that they are not eligible for the VAT rebate that public sector bodies receive and that this creates an uneven playing field.
