A question of trusts
25 February 2005
by Nick Cater
The Charity Commission ruling that charities can take on the legally-required functions of local councils - including maintenance of graveyards - is a dangerous precedent for the public, voluntary and even private sector.
This is the curious case of the Trafford Community Leisure Trust and Wigan Leisure and Culture Trust, two similar non-profit companies and charities created by local authorities. Their purpose: to hive off management of some or all of their cemeteries and libraries, which are the councils' statutory responsibilities, and leisure centres, golf clubs, parks, museums and suchlike, which are merely "discretionary" responsibilities.
Having rejected these bodies as charities in 2003 for insufficient independence, the Charity Commission changed its mind in July last year, though the surprising and unwelcome decision was only announced this week.
Despite proclaiming their community and cultural role, these "charities" bear little resemblance to Shelter, Oxfam or Cancer UK. They do not own their empires of leisure centre assets, merely lease them from the councils under partnership contracts. These involve taking on all the existing staff, dependence on a subsidy from the local authority and the "independence" of council oversight of their activities, including a place on their board of unelected trustees.
By outsourcing essential council functions, what advantages can these trusts offer? Could it be retention of power and the distancing of responsibility, deepening the democratic deficit and electoral disillusionment at hived-off council and government services, and easing asset disposals, erosion of standards and cash cuts?
Might it be the reduced public scrutiny of multi-million deals involving EU and government grants, such as the development of the historic Wigan Pier area with shops and hotels that has worried heritage professionals?
It is no surprise that the trade union Unison has complained about one trust's problems over back wages during the staff transfer and moves to remove employees from national pay bargaining. And if they think it will undermine wages and conditions, how long before these trusts start bringing in Dame Elizabeth Hoodless and her Community Service Volunteers?
The corrupting of charities' integrity through dependence on national and local government cash has already brought a warning from the Charities Aid Foundation chief executive, Stephen Ainger, that this could damage donations to legitimate causes, even before these trusts start waving their begging bowls.
It's not only charities at risk from unfair, subsidised competition. Why should companies put up with rival non-profit firms with guaranteed incomes, low taxes and a monopolistic position in the market?
This is far more than a muddle by misguided Charity Commissioners; it's a sleight of hand that lets the state off the hook of its legal duties, allows councils to make concealed cuts through the cheap-n-charity route, and fails to resolve the challenge of services the public says it wants but is reluctant to pay for via taxation.
For a principle-free government that dare not claim managerial competence and is desperate to avoid being held to account, the charitisation disposal of legal public responsibilities is the perfect match for Enron-style off-the-books private finance initiatives for education and health.
It's a cowardly new world in which councils can follow the example of Dame Shirley Porter and Westminster's graves scandal to perfectly legitimately escape the burden of looking after the dead.
And if cosy captive charities can run Wigan leisure centres, Trafford golf courses and council cemeteries, and be declared independent by the Charity Commission, there are plenty more public services that could find they need a chugger or two to balance the books.
Journalist and consultant Nick Cater is international editor of Giving Magazine and a contributor to the humanitarian portal AlertNet.Org