UK Chancellor of the Exchequer George Osborne has announced a £100 million Transition Fund for the voluntary sector as part of the government’s recent comprehensive spending review. The money will be allocated to voluntary and community organizations facing ‘real hardship’, he told the House of Commons.

According to civil society minister Nick Hurd, it will be aimed at service delivery organizations with low levels of reserves that are highly dependent on public funding streams vulnerable to budget cuts. Eligibility for the fund is likely to be principally for medium and large organizations (those with incomes of between £50,000 and £10 million) capable of playing a greater role in delivering public services in future. It is designed to give them ‘breathing space’ to prepare for such a role. £10 million will be disbursed in this financial year and the rest in 2011/12.

The announcement has been generally welcomed by the sector. Stephen Bubb, head of Acevo, the association of voluntary organization chiefs, said Nick Hurd had ‘pulled a rabbit out of the hat’ and Sir Stuart Etherington, chief executive of the National Council of Voluntary Organizations (NCVO), said the announcement ‘demonstrates that the government has listened to the sector and understands the important role we will play’.

However, Kevin Curley, chief executive of the National Association for Voluntary and Community Action (NAVCA), urged the government not to use the fund to prop up charities who had suffered savage and irrational cuts in funding from local authorities. He argued that this would effectively reward those authorities for bad practice. ‘Instead,’ he suggested, ‘the government should reward and incentivise good practice by councils … and should also reward organisations with clear plans for raising more money from places other than the local state.’ His remarks, he acknowledged, would be unlikely to meet with approval from groups in ‘bad’ local authority areas who had suffered overzealous cuts.

Sources
Third Sector Online, 20 October 2010
http://www.civilsociety.co.uk