Fag-Packet Figures and Half a Pint of Progress
Budgets, crisis, and bigger thinking in our Barely Civil Society
This week: we look at the budget and its impact on charities, consider how to balance our business needs with progressive taxation, and ask whether we do enough deeper, big picture thinking in charities. We also propose the creation of a dangerous street gang for charity sector Critical Theorists, and explain how to do economics with a packet of fags and a half of lager. All this and more career-nuking contemplation in this week’s Barely Civil Society.
It’s been a mad busy week. I’m working with one of my favourite national funders on strategy and evaluation (I tell them they’re my favourites, but I think they think it’s just what I say to all the boys…), an amazing ecology charity on their growth strategy (geddit?) in the North West, and of course still teaching about how to lead in the insane world of the charity sector for a training programme with another favourite funder. (….Oh wait! Maybe I do say it to all the boys.) Anyway, none of this has left time for rigorous editing, so please ignore my typos. Here we go….
The Budget
One of the things I’ve always noticed is that my maths GCSE seems to allow me to get very close to Government figures without a whole lot of effort. I discovered this some years ago, when I was interested in whether a certain policy would work at a national level. I was bored, and probably in the pub, so I looked up the number of working age people, looked at a percentage, and thought, “Hmm… and then it’ll be a bit less because of that… oh and don’t forget this… and…” poked at a calculator, added on some zeroes, did a bit of jiggling, and hey presto. I had basically come up with a central plank of the Tory party’s budget, and the figure was spot on when it was presented two days later.
So it turns out, the back of a fag packet does it. Of course, the Tory one was on a cigar packet, and the cigar packet was on a yacht, owned by a Russian billionaire.
Anyway, sadly, I don’t think this was because I’m terribly clever. Rather, it’s because most of the people in charge of our economy haven’t a f*cking clue.1
And so Rachel Reeves’ budget has appeared, trailed like a horror movie by Starmer with his usual perky optimism. If it was on the back of a fag packet, it must have been a duty free multipack given how long it took. The right wing press hate it, so it can’t be all bad. While I have my own reservations, I feel the complaints, even from sensible people, that employer’s NI is a tax on working people is disingenous. If your argument is that businesses will just pass on the pain to workers, that goes for pretty much any tax - it’s not the wealth that trickles down, it’s always other, less attractive, substances.
Yes, it could have been a wealth tax, but the numbers tell us that it just wouldn’t raise enough to make a dent. The thing is, you cannot let the roof cave in for 15 successive years and then not expect that everybody who lives there is going to have to pitch in. Especially because the people who saved the money have spent it all on yachts. It is grotesquely unfair. The only alternative is something truly revolutionary. Do people have an appetite for that? Can a Government survive that?
For all the concerns I share with others, it is at least not just an austerity budget, and I’m surprised and relieved they have been as bold as they have. I do note, however, that the supposed bonanza of investment is still half of the norm for the OECD. And that is after 15 years of active disinvestment and decades of liquidation of assets.
Impact on the VCS
NCVO's overview, impressively fast, suggested a mixed impact on the VCS, with benefits for communities and more financial challenges for charities. They note some initiatives which were not widely reported and I think we can all be pleased about. I quote:
“£240 million for local "trailblazer" programmes. They will streamline work, health, and skills support for inactive individuals.
Changes to VAT and business rates relief for private schools. VAT relief is removed. Business rates relief is for those providing full-time education to pupils with education, health, and care plans.
New legislation to prevent charity tax rule abuses set to take effect in April 2026.
£26 million for mental health crisis centres.
£300 million for further education and £40 million for the Growth and Skills Levy (formerly the Apprenticeship Levy) for training.
Research and development tax reliefs maintained and over £2 billion in health research and development investment.
Inheritance tax reliefs maintained for those who choose to leave a gift to charity in their will. Read Remember a Charity's full response to the budget for more information.
A 1.8% annual real-terms rise for all central government departmentsthrough 2029/30. This aims to support public services, including the NHS and schools.”
Read here: NCVO’s excellent budget briefing
There are other things. (I’m not sure how I feel about the increase in budget for the Charity Commission. To do what? Not to run a website that’s for sure. To tell everyone how shit we are in the Daily Hate Mail once a month?)
Meanwhile, there are signs of increased support and respect for local authorities - including a drop in the ocean of £600m for social care, and an overall £1.3bn for local authorities. We can only hope some may trickle through to the local VCS, long-starved of this vital traditional area of support, but honestly, that amount doesn’t suggest it. And that of course speaks to the general issue that the IFS (always a difficult one to pigeon hole politically, although they tend to be fond of markets) raised on Thursday: that their figures are almost as ridiculously low as the Tories’ were.
As for other areas: the additional money for the NHS is welcome, although like a sausage chucked into a black hole. I have also seen people in the VCS complaining that, again, the NHS gets even more money, while charities that support it, and would contribute towards the prevention agenda, get nothing. There is some truth in this - especially when you consider that all of the money spent on social prescribing has gone into paying for NHS social prescribers, and not the actual social prescriptions and ‘treatments’ offered by the voluntary sector. (This is like spending all your money on extra pharmacists, and then making them distribute stolen drugs.)
But how can we deny that is where the money needs to go? All I would add is that whenever anyone tells me that charities are not ‘effective’ or efficient, I do have to remind them what it’s like trying to get a blood test at my GP. The NHS could learn a lot from the effectiveness, frankly, of three old ladies and labrador running a church bake sale.
Eyes on the prize
NCVO were clear, as were others, that the NI changes could be tricky for the smaller VCS, and that was the biggest concern I heard people raise before the budget. An additional £1.3bn is being touted as the additional cost to the voluntary sector. There is now a joint NCVO and ACEVO letter calling for a charity exemption. That would certainly be welcomed. Without that, it will take time for us all to work out how it shakes down in each organisation, and much depends on the particular shape of your workforce - and how many people we have languishing on a bare minimum wage, tbh. The increase of employment allowance may - may? - write off the worst hit for the smallest, and that certainly was the intention. Nonetheless I can imagine for some it will be the proverbial straw…
Much as I see the potential for further disruption (and the initial responses I saw were actually fairly pragmatic, with rising concerns since I started writing) we need to keep our eyes on the horizon. Big picture. I know employer NI increases will sting, but that can’t afford to be the only thing we focus on when we want to make a better society.
And that feeling goes double for whenever I see someone complaining about the rise in the minimum wage. At that stage, I have to ask if we are really focusing on welfare at all - or just on the minutiae of running a small business? Yes, we have to do both. But some things matter more.
As I write, the complaints are getting more insistent - including worries that ‘not for profit’ social care providers will struggle. Yes, and this must surely be particularly important to those charities who employ large numbers of poverty wage carers. I already find that troubling, and have long said that the wages in the charity sector (even more in the social care subsector) are already exploitative and frankly immoral at the lowest end. So yes, I worry about the impact. But I also think there are concerns here about what exactly we have been propping up, and at whose cost.
Note: I started writing this on Wednesday and finished on Thursday night at 11pm. Things will change, and indeed, become clearer, and have been doing so right up to the wire. So please note these are initial reflections based on partial knowledge - not least because I have only got a GCSE C grade in maths. So please do not start flaming me on social media. What do I know?
Meanwhile, in Crisisville…
Meanwhile, the shit continues to hit the fan with some spattering alacrity in the VCS, and I’m pleased to see that people across the board are now widely calling what is happening in the sector a ‘funding crisis’. That’s good, because it’s moved from people simply claiming it’s always been this bad. People are taking notice.
That means the odd head is going above the parapet. I was talking last week about how funders need to get better at explaining what they do, and why they do it. My delight quickly evaporated when I read most of it, and honestly, I felt genuinely quite depressed having read them. (I asked a colleague if they had read the blog from one such, and they said ‘No, I’m scared to.’) Sometimes the responses feel like borderline gaslighting: ‘there is more money, not less,’ ‘It’s local authorities, not us’ ‘You just don’t understand what paused means.’ (Seriously?) And then of course the fundamental, grandiloquent refrain: ‘We are all in this together.’ Sigh. When I say grantmakers need to explain themselves, it’s only worth doing if they can also show they are listening. Really listening - which is not the same as just defending and justifying.
Under all of this are often sideswipes at those on the naughty step who are complaining. Again we met the fundamental dyad of immature raging supplicants who cannot understand grown-up things like money; and noble, forward-thinking philanthropists who need time to think beyond the ken of mere mortals. That way of thinking is so ingrained in the ideological narratives of the sector. And those who claim to be the ‘grown-ups in the room’ then swiftly position themselves right in the centre as the voice of reason. That is a power move, a way of quieting dissent, and of course, a way of presenting yourself as the essential gatekeeper. Always vital for the middle man after all. (Yes, I know, I do it too sometimes; I’m trying to stop.) The problem, I suppose, is that so often the narratives presented to deal with crisis are just justifications of why everything is exactly as it has to be.
I really struggle to believe, or accept this. In my day to day work, I am an absolute pragmatist - but I wouldn’t be in this gaff if I didn’t also have a streak of bright red idealism going all the way through me. I just wish sometimes we could think deeper, bigger, beyond a crisis - rather than than just trying to justify why everything has to be almost exactly as it is.
It is difficult to get anybody to understand something, when their salary depends on them not understanding it.
— Upton Sinclair
Critical thinking and my new street gang
And I think there is a lack of deeper critical thinking in the VCS - partly because the intellectual elite of our sector (like our society) are so bound up with the system itself. After all, it’s all either membership-based, or funded by the very funders who hold all the power. Most of the initiatives are tinkering at best, and at worst, flattery and boosterism. And that is on both ‘sides’ of the funder/ funded dyad.
I think we need to go beyond this. I read a very interesting article recently which looked at the academic literature about ‘nonprofits,’ which identified this very lack of critical thinking, and a tendency towards nothing but managerialist conservativism about nonprofit thinking, even at the level of academic study:
“only 4% of articles published within the period examined adopt critical approaches, with great variability in the ways articles exemplify core tenets of critical scholarship, and a general dampening of critical work over time.” (Toward a Typology of Critical Nonprofit Studies: A Literature Review; Tracey M. Coule, Jennifer Dodge and Angela M. Eikenberry.)
To be clear - ‘critical’ here doesn’t mean just ‘slagging off’. (Which admittedly is my favourite part.) The thing is that most of the study and interrogation they look at focuses on tweaking the existing, at increasing charity ‘effectiveness,’ and ‘better’ charity ‘management.’ Policy, in other words. Nothing questions the fundamentals of the system.
‘Critical’, in this sense,
“signifies a fundamental, often historically specific critique that is attentive to the conditioning effect of social, economic, cultural, and political structures—such as capitalism, patriarchy, or imperialism—on orthodox practice and understanding. The aim of critical work is the creation of more equitable and sustainable practices rather than preservation of the unjust and destructive social and economic systems many managers, management practices, and organizations serve to reproduce.” (Ibid.)
This is in the wheelhouse of ‘critical theory’, and some of you may know my buddies in the Frankfurt school (we’ve tried to set up a street gang, but Jurgen Habermas is rubbish at Drill music and Horkheimer looks fat in a hoodie). The authors in the above article, as Frankfurt folks would, recognise this as ‘conservatism’ - which may, the authors suggest, ‘result from the rejection of less understood philosophies and methodologies of critical inquiry in favor of more mainstream (positivistic) models of social science.’ I’m sure that is part of the picture, but I think it goes beyond that, to the fact that it is very hard to be critical of the thing that pays your bills. A factor of which I am all too aware, and it doesn’t help my anxiety.
In the sector - or perhaps rather, outside and in parallel to it, we’ve all seen more of this critique starting to happen around race and post/ de-colonisation, especially around grantmakers and ‘philanthropy’. That is absolutely to be welcomed. I would like that disruptive magic to be still-further broadened to other questions about class, capitalism, and patriarchy, and most of all, democracy: the very fundamentals of how we arrange and pay for care and justice in our society.
For all that our in-sector intellectuals seem not to be able to deal with this, academia is not much better (as the article shows). Academia is also very good at just talking to itself.
And before you say it, of course, I KNOW we don’t have time for critical theory when we have two staff members in tears about who gets first dibs on the toaster, our hand down the u-bend trying to unblock the community centre toilet, and 45 people in wheelchairs waiting to get home - and nobody knows where the minibus is.
And the reality is: while we’re still in a world where we have to panic about a 1.2% NI increase, the big thinking about what real, lasting, social justice would look like, is hard to do. But there is nobody else there to do it for us. And it is one of the things that civil society is for.
And finally, some good news…
They call the Institute of Economic Affairs a think tank: as in they TANK the economy.
But I’m very glad to see a supposedly “political and vexatious” claim by the very good Good Law Project against the Institute for Economic Affairs now getting serious (we hope) consideration from the Charity Commission. Who would ever have thought that a regulator with a Chair called, no really, Orlando, with links to the Tory party could have been accused of bias when faced with a blatantly political organisation which has always been at the heart of the Tory Government at its absolute worst? (Including the most recent days of Lettuce Liz and Krazy Kwasi.) 2 The ‘brains’ of the Hayekonomics neoliberal project in the UK since the 1950s, it has helped birth many of the disasters that charities in the UK try to deal with day in day out, so the refusal to even properly investigate was especially galling.
I doubt anything will come of it, but at least a bit of their donor cash will have to go on lawyers rather than social media. I bloody love the Good Law Project.
Have a good week, and good luck with your finance committee.
Another remarkable thing I discovered once (I’m such a geek and have no life) was that until very recently, gross domestic product and growth was analysed pretty much by a few questionnaires sent out to businesses by the ONS asking ‘has your business turnover gone up or down recently’. I mean if I used that methodology for charity impact evaluation, would you fund me? (I should note here that actually it’s a perfectly fine methodology - unless you have access to, you know, MASSES of tax data.)
Great history of the Tory party’s descent into free markets here, which looks in detail at the influence of the IEA.