Struggling social organisations get £100m to help deliver Big Society

A £100m fund to help struggling civil society organisations step up to the Big Society agenda has been announced today in the government’s Comprehensive Spending Review.

It comes as chancellor George Osborne announced that 490,000 public sector jobs were likely to be lost; victims of the drastic cuts proposed to curb borrowing currently resulting in debt interest of £43bn a year.

Reduced spending rather than tax increases would be the main filler to the £109bn deficit hole. While not specifically mentioning social enterprise, Osborne made a strong reference to public services being delivered by local, innovative organisations and independent of government.

‘A policy of rising burdens, regulations, targets, assessments and guidance has undermined local democracy and stifled innovation. We will completely reverse this,’ he said, drawing on policies of the Big Society including GP commissioning,' he said.

‘We should understand that all the services paid for by government do not have to be delivered by government.’

Personal budgets and new payment mechanisms for prisons, probation, and community health services, an indirect reference to Social Impact Bonds, were also mentioned, along with encouraging ‘new providers’ in adult social care, early years and road management.

These devolved services required a ‘dramatic shift in the balance of power from the central to the local’ Osborne said as he announced overall savings in funding to councils of 7.1 per cent.

The £100m ‘transition fund’ would go some way in helping these innovative organisations in the transition to public service deliverer.

It will be delivered by the Office for Civil Society in the Cabinet Office and is specifically for those in the voluntary and community sector in England ‘facing real hardship’, Osborne said.

A delivery partner for the fund is due to be appointed soon and applications will open as soon as possible, a Cabinet Office spokesperson said.

The cash – £10m available 2010-11 and £90m in 2011-12  – is to aid the sector in the short term. However, the CSR report states that reforms across the board ‘represent a significant increase in the opportunities and funding…in the medium and longer term.’

Osborne said: ‘Additional allocations will be provided to fund electoral reform, support the Big Society, establish community organisers and launch the pilots for the National Citizen Service, which will give young people for the first time a right of passage to citizenship.’

The fund has been secured despite a reduction of £55m to the Cabinet Office budget by 2014/15.

Osborne repeatedly stressed fairness in his speech and said the highest earners would be expected to pay more to ensure the poorest were not the hardest hit in the cuts.

The department facing the biggest challenge is work and pensions, which is aiming to find an extra £7bn a year of savings on top of the £11bn already announced by reforming the welfare system, dogged by £5bn of benefit fraud a year, and which has increased the retirement age from 65 to 66 by 2020.

Families will have their benefits capped to ensure they don’t earn more than the average earning family, although no figure was put on this amount. This is along side a shake up in social housing, announced yesterday before the CSR, which will see new social housing tenants paying around 80 per cent of the market rent for their homes while existing tenants have their rent safeguarded. Council houses for life have been abolished. However, the savings made will go towards building 150,000 new affordable homes over the next four years.

‘We’re all in this together and we must all make a contribution to the welfare system that helps people into work, but is also affordable to the families that pay their taxes,’ Osborne said.

‘Those with the most should pay the most, and that includes the banks.’

Other announcements included a 50 per cent increase in the number of apprenticeships, taking the number to 75,000; investment in the Post Office network; £1bn for social care through the NHS to support joint working with councils; £200m invested into offshore technology and almost £500m more for the £1bn regional growth fund, which aids regional economic growth.

In conclusion, Osborne said: ‘The decisions we have taken today bring sanity to our public finances and stability to our economy.’

Download the full spending review below.