What does Labour think of charities?

What would Starmerism mean for charities? Is Sir Keir the knight in shining armour our sector needs? Or would the left’s urge to nationalise see charities reduced to an advisory role, with a respected voice but no real place in service delivery? Our recent NPC debate, the second in our Future of Charity series, was our first chance to find out.

It’s not just an academic question. Opposition positioning invariably affects the policies pursued by government in response, and with our world turned upside down nobody knows what the next election will bring. So we were delighted to welcome Rachael Maskell MP, Labour’s shadow minister for the voluntary sector and charities; Cllr Paulette Hamilton, cabinet member at Birmingham City Council; and David Walker, a writer for the Guardian, to debate the issue. This was the second in a series of events on the future of charity, the first was with Conservative MP Danny Kruger.

Click here to watch the event in full.

The left has always been a little uneasy about charity

“If a rich man wants to help the poor, he should pay his taxes gladly, not dole out money at a whim.” So said Atlee’s biographer, Francis Beckett. It’s a quote which neatly summarises a dilemma generally absent in conservative circles, who are far less optimistic about the ability of governments to solve society’s failings. We certainly agree about the whim part, that’s why we go on about impact measurement, due diligence and theory of change so much! But can the state really do everything? The Labour party politicians we had to debate these issues clearly didn’t  think so.

Both Rachael Maskell (shadow minister) and Paulette Hamilton (Birmingham cabinet member) were adamant that charities play a vital role in our civil society and will be integral to Britain’s covid recovery. The speed at which foodbanks are able to distribute vital supplies to families in need, and the wealth of local knowledge possessed by community charities, were both remarked upon as evidence of the sector’s unique contribution. Paulette described charities as the pin which holds community strategy together. “We do believe in anti-austerity” she said, “but I do believe there is a place for charities”.

The biggest changes called for were around funding and contracting.

Funding needs to be more secure

A valid criticism of the charity sector is that its presence is not always led by need. This was certainly what we found in our “Where are England’s charities research?”, which revealed how wealthier areas tended to have more charities than poorer places. Paulette argued that if we want to get the most from charities then they need to be funded properly, and as a priority. If charities go under, she said, “we don’t get them back”.

This is especially true in a crisis. “the government has been incredibly slow at getting money out” argued Rachael “and there is far too little of it. It really seems like the loose change at the bottom of the pocket is what has been thrown to the sector, as opposed to really giving it a proper bailout and support, to see it transition into the next era we are going to be part of.”

Even in normal times, the precarious nature of charity finances can undermine long term thinking. Rachael said that Labour would sustain the sector so charities could focus on their work not on their survival. What this would look like in practice is unclear, but it would likely involve partnerships between government and charity, which Rachael argued should be much more robust than the contracts the sector fulfils today.

Partnerships must go beyond contracting

In our State of the Sector research we found that charities are fulfilling ever more public sector contracts, that they expect to be doing even more in future, and that they often subsidise this work with income from other sources.

Rachael described this as a servant/master model, in which the state sets the terms and the sector fulfils the contract. It’s not robust enough, she said. Charities need to be able to challenge but they’re scared to bite the hand that feeds them. Moreover, large charities can lose their authenticity by chasing contracts, she argued. The result is that charities morph into what governments want to contract out, rather than using their knowledge to shape government policy. Rachael advocated for a different type of partnership, in which government works with charities to direct money to where it’s needed.

Similarly, Paulette argued that charities should be treated by councils as equals. “We shouldn’t just tell them what to do. We should be working with them to ensure we shape our policy… and see them as critical partners that are funded.”

But would it play out like this? David Walker had his doubts. Labour will always look kindly on the issues charities care about, he said, but it is distrustful of privatisation and would therefore probably be suspicious of charities being major providers of public services. The debate continues, but it’s clear that Starmer’s Labour is very different to Corbyn’s.

This was the second in our series on the future of charity, the first was with Conservative MP Danny Kruger, who is leading a review on the role of the charity sector, and Reform think tank boss Charlotte Pickles. What the future holds will be a big topic of debate at our upcoming online NPC Ignites conference. Book your place here.

Watch the full event below: