- Conference
- 2014 Community Service Group Conference
- Date
- 31 October 2013
- Decision
- Carried
This Conference deplores the situation whereby public sector contracts with charities are often not on a full cost recovery basis (basically, staff costs plus overheads).
Where this occurs, the consequence is a shortfall between contract income and the cost of delivering the contract. This effectively leaves affected charities to choose between cross-subsidising state contracts from other charitable funds or reducing the terms and conditions of the staff who will deliver the contract.
Where the response is to attack terms and conditions this inevitably helps fuel the ‘race to the bottom’ faced by our members and the wider workforce.
Where charities decide to cross-subsidise, this in effect turns charitable donations into a form of hidden taxation, which, if donors realise what their money is being used for, could damage the reputation of the organisation concerned and lead to a fall in income with all the consequences that might flow from that, including job losses. It could also damage the charitable sector more widely with widespread reductions in donations and consequent job losses, potentially leaving the often vulnerable people the sector serves with nowhere to turn for help.
Without further research it is unclear exactly how widespread the problem is but one known example is Shelter whose audited accounts show a shortfall on legal aid contract income against delivery costs of over £20.73 million over the past 8 years. That is quite a subsidy from charitable income and anecdotal evidence suggests Shelter is far from the only charity affected although, unlike Shelter, it is often difficult to tell or quantify from their published accounts.
Therefore, this Conference calls upon the Community Service Group Executive to:
i) Carry out research into this matter and gather information on examples of this practice;
ii) Use this information to publicise and campaign against this practice; and,
iii) Report back to next year’s Conference on progress.