North-South split fear on Big Society

DONATIONS and support from businesses to fund organisations set up as part of David Cameron’s “Big Society” could worsen the North-South divide, as donations are unevenly distributed in favour of London, a new report has warned.

The report published by centre-left think tank the Institute of Public Policy Research (IPPR) North argues that relying on donations from businesses to provide resources for social action will put areas such as London – where large numbers of big business are headquartered – at a huge advantage over towns and cities in the North.

Forty charitable donations of £1m or more were made in the capital during the 2009/10 financial year, compared with only six such donations in the North East of England in the same timeframe.

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The IPPR says that the Government should therefore boost giving in areas where the private sector is weaker, such as Yorkshire and the Humber, by pledging to match a proportion of business donations for a fixed period of time.

In the think-tank’s new report Can the Big Society be a Fair Society?, it is argued that areas with a weaker private sector are the areas where voluntary and community organisations are more reliant on public funding.

Statistics show that the proportion of voluntary and community organisations in receipt of public funds is 43 per cent in the north east and 39 per cent in Yorkshire and the Humber – compared to just 33 per cent in London and the south east.

Spending cuts and a move to greater reliance on business donations could therefore doubly disadvantage organisations in the North unless the government provides innovative forms of finance, the report argues.

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Ed Cox, director of IPPR North, said: “Our research shows that the Big Society will not be fair to the North without changes to Government support for philanthropy and charitable giving.

“Goodwill is beginning to wear thin as people in the voluntary and community sector try to deal with budget cuts, and organisations in the North cannot turn to big corporate or high-value donors to make up the gap as London-based organisations can.

“We need to target what little money there is to organisations that struggle to find it elsewhere.

“Less attractive organisations that lack donor appeal, or those operating in areas where business or corporate gifts are hard to come by, should be a priority.”

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The IPPR makes various recommendations as to how the services offered by voluntary and community organisations could survive the Government spending cuts and make Mr Cameron’s Big Society plans flourish.

It says that the new Big Society Bank – which will take around £400m out of dormant bank accounts to fund social projects – should offer financial products that are accessible to both small and large organisations and should also support a range of forms of finance.

Meanwhile, the Government’s Transition Fund, which aims to help those groups struggling as the Big Society takes off, should provide “seed corn” grants to help social organisations to become more enterprising, in order to make them more sustainable.

Commissioning should be reviewed, the IPPR says, so that voluntary and community organisations, social enterprises and service users are involved in identifying need and shaping services.

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A “strongly-branded” local community fund should also be established in priority areas, backed by a government pledge to match a proportion of business donations for a fixed period in order to strengthen relationships between the voluntary and private sectors.