Sector predicts both uncertainty and opportunity in hung parliament

07 May 2010 News

Civil society organisations are facing a worrying period of insecurity as a hung parliament appears nigh on certain, many sector commentators warned today.

Civil society organisations are facing a worrying period of insecurity as a hung parliament appears nigh on certain, many sector commentators warned today.

However, some observers surmised that the prospect of a coalition government may not be all bad, offering new opportunities to influence and a more diverse legislative programme.

Here are some of the responses, hot off the press….

Andrew Scadding, Thai Children’s Trust

Andrew Scadding, director of the Thai Children’s Trust, said today’s outcome reminded him of a quote from a US Senator who had just been voted out of power: “The people have spoken, the bastards.”

What will follow is a period of uncertainty and “uncertainty is bad for fundraising because people don’t know if they can afford to give to charity”, he said.

“Confidence in business and confidence in fundraising are the same and people are going to be worried until they see whatever new shape emerges.”

This ambiguity will be particularly bad for charities working overseas because they have already suffered from increased foreign exchange costs and now the pound is drifting down again.

Scadding said a hung parliament wasn’t a bad scenario for the sector but it was disappointing that all three parties were given a bloody nose. “The Tories didn’t win the majority they were after, Labour lost a whole lot of seats, and the Lib Dims stalled, at best.  If it had really been a vote for multi-party democracy then the LibDem vote would have risen, and that was missing.”

He opined that the worst outcome out of a possible Labour/LibDem coalition, Conservative/LibDem coalition, or Tory minority government, would be the latter, because it would prolong uncertainty until the next election, potentially in the autumn or next spring.  And even then there would be no guarantee of a different result.

“A lot depends now on the maturity with which Nick Clegg handles the next few days,” Scadding said. “I think he can only work with the Tories because he stated a few days ago that he could only form a coalition with whoever won the most votes and the most seats – and that’s the Conservatives.

“He has to do whatever deal that is plainly in the best interests of the country.”

Malcolm Hayday, Charity Bank

Malcolm Hayday, chief executive of Charity Bank, warned that the possibility of another election in 12 months time casts doubt on the forthcoming public spending review.

“One was due to be held straight after the election, and that is crucial for knowing how much local authorities and others are going to have to spend in 2011 onwards and therefore how much voluntary organisations will receive.

"If we face another 12 months of uncertainty, organisations are going to be expected to enter 2011 and beyond effectively not know how much they’re going to have to spend to deliver their services.

"The inevitable then happens that community groups etc feel morally obliged to continue to provide those services without knowing where the funding is coming from."

On the nearer-term prospects, he added: “I suspect that if there is going to be a period of horse-trading and negotiation, they’ll be focusing on things other than the sector; we may not be part of that bargaining.”

Louise Richards, Institute of Fundraising

The Institute of Fundraising’s director of policy and campaigns Louise Richards said there could be both potential positive and negative outcomes for the sector should the political environment remain uncertain.

Richards expressed concern that in the lead-up to the election there had been little mention of the sector by either of the three party leaders, and that the sector “seemed to be relegated to the second division”. As issues of forming a working government overwhelm parliamentarians into the future, Richards said there is a “concern that the voluntary sector will be put on the back burner”.
Reform of things such as gift aid, Richards feared, could fall even lower on the political agenda. The failure of former minister for the third sector Angela Smith to win her own seat means that the sector will have its tenth minister in as many years, said Richards, who also voiced concern that the Office of the Third Sector could be moved or undergo structural change.

On a more optimistic note, Richards suggested that charities reliant on statutory income may get “a blessing in disguise”, should touted public spending cuts be held up in the parliamentary process.

She also noted that the high proportion of new MPs and a potential coalition government could allow charities more lobbying room and the opportunity to pick and choose the best parts of different party manifestoes to push for.

Deborah Allcock-Tyler, Directory of Social Change

The Directory of Social Change warned that a hung parliament “could be a recipe for gridlock and delay”.

Debra Allcock Tyler, chief executive of DSC, said that the situation could be dire. “It will make it difficult to re-evaluate or scrap policies which are failing. Money will continue to go for things which are not needed, and not be redirected to things which are really needed because of a lack of consensus.”

She warned that if the situation drags on, decisions on funding agreements up for renewal or review in 2011 could be delayed longer than usual and that “a whole slew of programmes could be left in limbo”.

However, Allcock Tyler offered some glimmer of hope in the event of a permanent coalition or minority government. Without a party dominating the legislative agenda, she said: “There may also be new opportunities to influence. It could offer a chance for voices and ideas which have been excluded from political debate in the past to have an airing – perhaps via smaller members of any coalition government.”

Kim Sutton, Foundation for Social Improvement

Kim Sutton, director of the Foundation for Social Improvement, which works with small charities, said it was perhaps too early to judge what may happen to the sector or the government itself.

However, she said that a hung parliament would not necessarily be a disaster for the sector. “We mustn’t be afraid of a hung parliament, indeed experiences of minority governments worldwide shows that these arrangements often lead to a more diverse legislative programme,” she said. Minority and coalition governments in New Zealand, she argued, have “delivered strong social legislation that must be negotiated on the issues rather than party lines”.

Sutton said the FSI will begin communications with all parties in parliament to promote the cause of small charities.

Allison Ogden-Newton, Social Enterprise London

Allison Ogden-Newton, chief executive of Social Enterprise London and deputy chair of Acevo, described the election as “absolutely fascinating” and said it was a “night for the voters”.

Candidates who had shown themselves to be lacking in integrity, either through personal greed or in their party’s policies, were shown the door, while those who represented clear policies and progressive politics, whatever their colour, did well, she said.

“Nobody got away with anything,” she said. “None of the spin from the campaigns gained any traction – the fact that we didn’t give any party a landslide showed that in the end it came down to policies and issues, and the electorate spoke.  We saw an end to cynicism in politics.”

Ogden-Newton added that a hung parliament would present an opportunity to the voluntary sector because the politicians will be forced to focus on the issues.  “For those of us who are selling social transformation there is a real opportunity here because they will be looking for a mandate to make things happen.” Civil society organisations must make sure they are ready to “hit the ground running” to take advantage of the situation, she advised.

Jackie Ballard, RNID

Jackie Ballard, chief executive of RNID and a former Liberal Democrat MP for Taunton, predicted it would be Monday before any news emerged about any deals between the parties.

“The leaders are being advised to sleep today and start talking to each other tomorrow, but there will be an imperative to announce something by Monday in order to minimise any impact on the stock market,” she said.

She suspected that David Cameron would seek to govern with a minority Conservative government, and charities would face a period of doubt about what elements of the Tory manifesto might be implemented that would affect them.

But whoever forms the government, the danger remains that they will look to fill holes in public spending on the cheap, Ballard said.  “And because we are charities and our mission is about people, we will try and do it but will have to do so on declining income from donors - and that will be difficult to not be able to do what needs doing.”

Adding even more uncertainty to the mix is not knowing who the minister for the sector will be, with Angela Smith losing her seat, or even if there will be one in the coming period of fiscal tightening, she added.

Roger Chester, Lionheart

Roger Chester, head of finance and administration at Lionheart and deputy chair of CFDG, said: “We’re just in limbo aren’t we; it’s going to take at least a week to sort out. Things like gift aid aren’t going to be progressed - even the civil servants are going to be more interested in protecting their pensions.

“There’s clearly going to be a drastic cut in public finances and that’s going to be bad for our members.”

Joe Saxton, nfpSynergy

Joe Saxton of nfpSynergy said that a Conservative-led government could be a good thing for the sector, and for fundraising in particular.

“A Conservative-led government could be quite exciting because I think they’ll have some entrepreneurialism, some fresh ideas, a lack of baggage that could be quite empowering,” he said.

“It has been a complete failure of the Labour government to do almost anything interesting to encourage fundraising. It’s changed the tax regime to make gift aid happen, but that’s a different thing… a Conservative-led government has quite a lot of potential.”

But, he added, the sector will have to think more strategically about how to go about demanding reform.

“What we may see is a lot more focus on what a Conservative-led government could do through policy, through regulation, through initiatives and ideas, because it’s going to be very difficult for it to get anything that needs to get a vote in the House of Commons through,” he said.

Gone will be the days when the sector can simply demand more money from the government, Saxton said. “I think the sector will need to get smarter about thinking about things it can do that don’t require money and don’t require legislation. How can we use existing resources better, faster, quicker?”

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