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Was the £100m Transition Fund due to be allocated to the sector anyway?

The dust has settled a little following the comprehensive spending review, and it may be time to take a look at whether the Office of Civil Society did well or badly out of it.

At first glance, it looks like it suffered worse than average. Three years ago, when it was the Office of the Third Sector, the annual spend was £167m. Now it’s £117m, which is a drop of 30 per cent. After inflation, it’s more like 36 per cent.

However there are two other factors to think about.

One is the £100m Transition Fund.

This has been presented as new money – a bonus designed to soften the blow for charities losing government contract income – so at first glance it looks as if that shouldn’t be counted in the general OCS budget.

However, if that were the case, the general budget for the OCS would drop to £92.25m a year. This is a real-term drop of 50 per cent, twice as much as most departments.

A more likely scenario is that the £100m Transition Fund was money due to be allocated to the sector anyway, and has just been given a new name.

This looks similar to the time, back in the days when it was the OTS, the department pulled together various bits of existing funding and underspend, slapped the name Hardship Fund on it, and presented it as cash that was “new to the sector”.

Stephen Bubb called the Transition Fund “a rabbit out of the hat”, but it looks like it was the sector’s rabbit in the first place. The OCS, employing the smoke and mirrors Nick Hurd abhorred in the Labour government, has skirted around that fact.

This isn’t bonus money. It shouldn’t be considered a replacement for either the £100m the sector’s lost from transitional relief, or the £143m extra the sector will have to pay in VAT from the start of next year. Those two rather fat rabbits have disappeared into the government pot, and are going to stay there.

The second confounding factor is the youth volunteering budget – and here the situation begins to look a bit more hopeful.
The previous government spent £117m in three years through youth volunteering charity v. Now, however, there’s a fresh wind blowing through that sector, and it’s blowing towards the government’s flagship programme, National Citizen Service.

The OCS will pay an initial £50m for two NCS pilots, but thereafter the programme will be transferred to the Department for Education. It looks likely that little youth volunteering money will be spent by the OCS. Some back-of-an-envelope calculations suggest this will save the department £80m a year.

So where does this leave us overall?

If you assume that the Transition Fund should be counted as part of the general budget, then discount the youth volunteering spend, then you discover the OCS has lost around a quarter of its budget – just like everyone else.

  • Patrick Ibbotson

    What a fantastic article. At the Big Give we run a programme called Philanthropy in Schools which aims to inspire the next generation to understand the importance of giving! If you are interested in the programme please contact us on schools@thebiggive.org.uk or go to;

    http://content.thebiggive.org.uk/about/opportunities/schools-philanthropy/

    • Leon Ward

      Thank you very much Patrick. Pleased you liked it.

      Could you tweet me in that information and I’ll give you a plug? I’m at @LeonJward

  • Patrick Ibbotson

    Hi Leon – I have sent you a tweet. Thanks for plugging the programme!