PracticeConsultingCharities – Keep councils at arm’s length

Charities - Keep councils at arm's length

Charities must retain independence from local authorities despite the increasing number of them which provide public services under contract from councils, according to the Charity Commission.

The latest commission guidance, ‘Charities and Contracts’, is intended to strengthen charities’ involvement in public-service delivery. It aims to help charities new to the contract culture overcome difficulties.

The report emerged at a time when experts are warning that charities are becoming increasingly dependent on local authority contracts for their income.

Adrian Randall, charity partner at Moores Rowland, said: ‘Charities are agents of local authorities, whether they like it or not, where they are providing services which were previously provided by the authority.’

Local authority funding of charities and voluntary bodies amounts to about #1.2bn annually. An increasing proportion of this funding is paid to charities, not as discretionary grants, but as fees for services they are contracted to provide to the public as agents of local authorities.

Chief charity commissioner Richard Fries said: ‘Strong partnerships between charities and public bodies are essential to the delivery of good quality, value-for-money public services in fields like social welfare, health and education.’

The guidance highlights areas of potential difficulty. It urges charities to ensure they abide by their constitution when providing contract services, suggests how far charities can go to use their own funds to finance services, and advises charities on how to handle conflicts of interest.

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