Charity funding and the new Government

Summary of speech by Ed Vaizey MP, Minister for Culture, to the launch conference of the 2010 ACEVO Funding Roadshow, presented by Action Planning on 1st July 2010,

The Minister opened by emphasising the importance of the Big Society agenda, which he described as ‘breaking state monopolies and devolving more power down to neighbourhoods’. He emphasised that it is not an attempt to ‘palm off responsibilities’ but is instead a programme for working much more extensively with grassroots organisations. He recognised that voluntary organisations ‘play a central role in the cultural lifeblood’ of the UK’ but also stressed that the emergency budget should leave no doubt about the ‘scale of the cost-cutting challenge we face.’

DCMS would ‘play its part’ in the deficit reduction programme and the Minister also recognised that cuts in the DCLG budget would affect local authorities, which are also an important source of funding for local cultural institutions.

The Minister indicated he would seek to ‘mitigate the impact of cuts’ by bearing down on the administrative costs of the department, changes in the income distribution of the Lottery (see below) and measures to encourage philanthropy.

Addressing the Lottery first, he indicated that he was worried that the Lottery was in danger of becoming ‘the province of Government’. Subject to the current DCMS consultation, the proportion given to arts, heritage and sports charities will increase and responsibility for ‘helping to fund the statutory sector’ would be removed. The proportion routed through the Big Lottery Fund would fall from 46% in 2011-12 to 40% in 2012-13 “which is where it will stay”.

The Minister said that Big had indicated that it could manage this change “with no effect on current grantees” (presumably as a consequence of the offsetting impact of restoration of Olympics funding post the Games). Annual sales of Lottery tickets are also forecast to increase to £5.5 billion, compared to the previous forecast of £5 billion.

There will, therefore, be a £150m uplift in arts, heritage and sport funding which, the Minister hoped, would also benefit the sector. He cited, in particular HLF projects, 80% of which are delivered by the sector, accounting for around half by value of HLF grants.

The Minister is also keen to ensure that local community arts and heritage organisations continue to be supported, alongside major national institutions. Although specific decisions are taken by distributors like Arts Council England, the Minister emphasised that they operate within departmentally set objectives and must ensure that their programmes help to reduce deprivation, foster local community initiatives, strengthen, strength community spirit, encourage volunteering, and involve the public in setting priorities.

The DCMS consultation is open until 21 August (see DCMS website for details).

The Minister then addressed a ‘personal hobby horse’, the need for more collaboration and mergers in the sector. He commended the NPC report ‘What role of for charities’ and Stephen Bubb’s speech on the same theme. Government could help facilitate the process by providing a “much clearer set of gateways” and a “much more coherent overview of what charities are working in each sector.”

Finally, the Minister made it clear that he and Jeremy Hunt (Secretary of State) wanted to do everything they could to promote philanthropy. This included an offer to write to thank major donors supporting cultural projects. He indicated he was also keen to meet donors on his visits to institutions.

“We can’t replicate US philanthropy” commented the Minister “but we can do much more the recognise and thank donors.” The Minister saw the promotion of philanthropy as a “20-year project”.

He also saw “enormous scope” for large organisations to help mentor smaller ones and recognised that tax reform had a part to play, citing the Treasury led review of Gift Aid. “Complications do put people off” the Minister observed. All tax measures will now be assessed to check their impact on the sector.

The Minister closed by seeking extensive feedback on what more the Government could do to help, asking particularly about whether long term funding agreements are they are a good idea, how online giving might be encouraged, how fundraising for endowments might be made easier and what he could do to help promote legacy giving. “There are no easy answers” he concluded “but the door is open and no idea is sacrosanct.”

Paul Burstow MP, Minister for Health and Social Care
Maria Miller MP, Minister for Disabled People (on DWP funding)
Ed Vaizey MP, Minister for Culture