Leading Article: Uncharitable proposals from the state

A REVOLUTIONARY movement has been launched to destabilise Britain's charities. Its chief theoreticians, from a little-known think-tank, want their status abolished. That means no more tax breaks for some, and reduced regulation. The only former charities still entitled to such concessions would have to work exclusively for the state. Oxfam, Mind, the NSPCC and the National Trust - to name but a few - would be poorer by millions of pounds a year. The loss of support to the people of the Third World, abused children, the mentally ill and the national heritage would be great.

This proposal might easily be dismissed as irrelevant musing from an ivory tower. Treasury officials may dream of such drastic change: the savings in tax relief would be huge. Equally, government ministers may long to muzzle their voluntary sector critics and cut off opponents without a penny. But surely it could not happen? After all, it seems only five minutes since Tory chancellors extended tax relief on private giving.

The charitable should not be complacent. This document bears the fingerprints of government. Though produced by the Centre for Research and Innovation in Social Policy and Practice, it was paid for by three government departments and its authors are former Home Office advisers. A cynical interpretation is that the Government's friends in the private sector have complained that charities enjoy an unfair advantage over them. It may not be long before ministers echo the revolutionary message.

The authors' argument is that charities are a medieval concept with no place in the modern world. They recommend splitting the voluntary sector into two: providers of services paid for by the state, and campaigners for change. This division is arbitrary and artificial. Some of the best suggestions for improvements in social policy come from those who give people practical help.

Yet the authors would remove tax concessions and regulation from any group challenging the status quo. They would also give the Government so much financial control over those providing services that any dissent from that quarter would be silenced. Many charities might be bankrupted: the tax loss would be large and donations could plummet as people felt uneasy about supporting organisations no longer regulated by the Charities Commission.

These proposals are not the way to reform Britain's charities. Some, it is true, are inefficient, financially precarious and unaccountable. But the solution is not to cut off their tax concessions. The Audit Commission could be charged - as in the public sector - with ensuring that voluntary organisations provide value for money. This would strengthen instead of weakening the ethos of charitable work. A society in which the state feels overwhelmed by welfare demands cannot afford to cock a snook at those who provide so much for so little.