When Britain’s leading liberal commentator on social affairs, Polly Toynbee, laid into Prime Minister David Cameron’s Big Society project last week, she was at pains to say that she has nothing against stronger communities and more volunteering – she was bristling at the fact that the public spending axe has fallen on charities. Since “governments are defined not by words but by how they distribute their budgets”, she argued, the Big Society is a “big, fat lie”. Maybe. Yet by putting on her tin helmet and digging in to defend the status quo Polly is showing her own, and much of the charity sector’s, unwillingness to engage in the debate about how to remake Britain’s social model.
Public expenditure is going to have to fall, that’s inevitable. (For what it’s worth, we think that Cameron’s government plans to cut too quickly, responding to political rather than economic considerations. But that is a question of timing – sooner or later government in Britain, like other countries, is going to have to get smaller.) Polly does not seem to dispute that point, her challenge is that it is wrong, indeed hypocritical, for the pain to be inflicted on the charitable sector.
Read on, however, and there is the startling statistic that “the £35bn voluntary sector is 40% sustained by state support – more than in most countries”. If that’s the case, it’s pretty hard to see how the charity sector can avoid feeling some of the pain from public expenditure cuts. Nor does Polly ask whether that £14 billion or so is actually being well spent. Yes, she points to charities that are suffering from the cuts – but maybe that money is better spent elsewhere?
The fact that this question is probably unanswerable highlights the central problem – as New Philanthropy Capital has pointed out – we have very little idea about the impact of the billions of pounds that the government grants to the charity sector each year. Yes, there is a danger that slash and burn emergency budgeting means that good charities will suffer undeservedly but we cannot ignore the fact that government is probably going to have to spend less on the voluntary sector and look for better value for money.
As well as better measurement of charity impact, which will take time to feed through, we think that match funding initiatives by government have the potential to leverage more private giving – every scarce tax pound can work harder if it levers another pound of philanthropic giving. We don’t expect Polly to agree with us on this one. Her 2008 assault on the rich, Unjust Rewards (co-authored with David Walker), sneers at philanthropy and argues for more taxation as the route to social justice. This stance plays well with the followers of her column in The Guardian, many of whom work in the charity sector, but does not really help. Tax rates are shooting up already (Yes, Polly, we can hear you – it’s all the bankers fault, they are rich and some of them are even philanthropists – but massive tax hikes are as unlikely as they would be unhelpful to the economic recovery we need if we are to keep financing essential public services.) We need new thinking, not old bash-the-rich orthodoxy.
So how do we get private giving, which is also being hit by the recession, to fill the funding gap and drive a productivity miracle in the social sector?
This is a change that has already started. As we argue in the book, Britain lost the giving habit in the 20th century as marginal tax rates rose and the social contract settled around the idea that government would provide for society’s needs. Over the last 30 years tax rates have fallen and there has been a resurgence in entrepreneurial wealth, which is starting to turn into a revival of interest in philanthropy. The challenge is accelerating that cultural change (a challenge that the Prime Minister has so far shied away from, probably for fear of associating the Big Society with the largesse of the rich).
Creating a culture of giving, and a bit of competiton, is part of the solution, which is why we would love to see a British Giving Pledge. But this culture shift is not just about the rich. Our political leaders also need to be clear about the areas where the state is going to have to pull back and where philanthropy needs to step in (like the arts and higher education) and, in the short term, a 5% payout rule, for foundations could release maybe a billion pounds a year of extra funding for the charitable sector.
Commentators also have a part to play. Polly Toynbee is an important and influential champion for social justice but in refusing to accept that things need to change she is doing the cause she serves an injustice. Polly, it’s time to take off the tin hat, leave the trenches and join the debate.