NCVO chief executive Sir Stuart Etherington has called on the government to double the size of the Transition Fund to prevent civil society organisations from going to the wall before statutory funders decide whether to continue contracts.
Sir Stuart made the call in his speech to the NCVO annual conference this morning and also in what he described as a "jousting session" with civil society minister Nick Hurd earlier which will be aired on the Today programme on BBC Radio 4 tomorrow.
He said that in many respects the speech he gave today was "the hardest I have ever given" in light of the "immense challenges" facing the sector at the moment. He reserved special criticism for those factions of the sector who claim that the public spending cuts will be a positive thing because it will restore the sector's independence from government, saying "such arguments are fundamentally flawed".
"Nearly three-quarters of the funding that our sector receives from the state is in the form of contracts to deliver services," he said. "It is the state that is dependent on us, for a whole range of services and support that are essential for the wellbeing of people and communities...which is why the scale and speed of the cuts is of such concern."
He said the uncertainty created by the cuts was compounded by another problem unique to the sector - the fact that a third of charities have no reserves, so cannot tide themselves over if statutory funders inform them at the last minute that their contract will not be renewed.
"That is why I believe the Transition Fund is so important," Sir Stuart said, "because it will help to ensure that good voluntary organisations do not go to the wall simply because of a pause in contracting. That is why I am calling for it to be doubled."
Community carpet-baggers
He also used his plenary address to demand an "asset lock" in asset transfers, so that "we don't see a rise in 'community carpet-baggers' who acquire buildings or other assets ostensibly for the benefit of the community, but then sell them on at a profit, depriving the local community of their use.
And he said he was urging MPs to support Chris White's private member's bill on social clauses in service delivery contracts; reiterated the call for a level playing field on irrecoverable VAT, and said NCVO would be working with others in the sector to take forward the Better Asking Campaign outlined in the Funding Commission report.
Pro-bono charity doctor service
NCVO chair Martyn Lewis used his opening address to float the idea of a "pro bono charity doctor service" where "hit squads" of private-sector legal and financial experts would make themselves available to CSOs who need help. "They would do a fast analysis of the issues and recommend solutions," Lewis said. "They would do so in the context of a wide knowledge of the charitable sector and might then recommend partnerships, sharing of back office functions, joint ventures and even mergers with other charities.
"The overall aim would be to ensure that the work of the charity continues one way or another. And all free of charge! NCVO is already working on this, so watch this space."
He added that he had also been approached by a philanthropist who is prepared to stump up a "substantial six-figure sum" to fund the cost of charity mergers.
Lewis also made the point that transition funding should give just as much priority to "those organisations dealing with the fraying edges of our society", including those organisations "with little or no chance of turning themselves into social entrepreneurs. They must be an integral part of the Big Society alongside the social entrepreneurs."
