NCPA - National Center for Policy Analysis

How the British Government Lobbies Itself and Why

July 5, 2012

The relationship between charities and the British state has been significantly transformed in the last 15 years. There is a gulf between the public's perception of what is charitable -- a traditional view still dominated by visions of self-sacrificing volunteers and jumble sales -- and the reality where charities have become operating bodies of the state, says Christopher Snowdon, a research fellow at the Institute of Economic Affairs.

This relationship has changed over time as British charities have become increasingly reliant upon the government for financial support.

  • Between 1997 and 2005, the combined income of Britain's charities nearly doubled, from £19.8 billion ($30.85 billion) to £37.9 billion ($59.05 billion).
  • The largest portion of this growth came in the form of grants and contracts from government departments.
  • According to the Centre for Policy Studies, state funding rose by 38 percent in the first years of the 21st century while private donations rose by just 7 percent.
  • About 27,000 charities now receive more than 75 percent of their income from the government.

It has been argued that state funding weakens the independence of charities, making them less inclined to criticize government policy. However, this assertion only addresses the surface of the problem. Considered more broadly, this strengthening relationship between government officers and charitable causes threatens to undermine democratic functions themselves.

  • A normal activity for charities (which usually have niche interests) is direct lobbying of politicians and indirect lobbying of the public.
  • While this is not inherently dangerous (lobbying is not a new phenomenon), the true problem comes from the fact that these lobbying efforts are now paid for by the state; in essence, the government is lobbying itself.
  • These relationships with enormous interest groups all-too-often grant public officials substantial influence in the public arena long after they are out of power.

One possible solution to these problems would be for the United Kingdom to adopt the United States' approach, which bars organizations from charitable status if they spend more than an "insubstantial" proportion of their resources on lobbying.

Further, a new classification of non-profit should be created for those organizations that receive substantial assistance from the state to avoid confusion with truly charitable causes.

Source: Christopher Snowdon, "How the Government Lobbies Itself and Why," Institute of Economic Affairs, June 2012.

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