Charities And Local Government - New Guidance

In February 2007 the Charity Commission issued guidance to Charities on the delivery of services on behalf of public bodies (CC 37). This replaces the previous guidance 'Charities and Contracts'. This contains a useful run through of the key points charities and public bodies need to consider when entering into contracts to deliver services. We have summarised the key points and issues raised from this guidance in this update which may be useful for public bodies when considering whether to use charities to deliver any of their services.

The government is encouraging increased participation of the voluntary sector in public service delivery as a means of reforming public services. The outsourcing of services can be to a range of bodies such as charities, industrial and provident societies and housing associations. This update looks at some of the issues involved in using charities to deliver these services.

There is no general prohibition on charities delivering public services even if a public body has a legal duty to provide the service provided the local authority retains the "functional discretion". Charities can therefore be used to deliver certain services.

Restrictions on using charities:

Public bodies need to be aware that there are certain restrictions they need to consider when deciding whether a charity is the appropriate vehicle to use to deliver a service:

Charities can provide only services which are 'charitable' and which fall within a recognised charitable area e.g. providing housing for the poor, providing leisure services for the public;

Charities must only undertake activities that are within their objects and powers;

A charity's activities must be for the public benefit; and

Charities must be independent.

Public service delivery presents both opportunities and risks for charities and it is useful for public bodies to be aware of these when looking to enter into arrangements with charities.

Advantages in using charities:

A charity's purposes are often broad and may (depending on its constitution) overlap with the duties of a public authority. Using a charity can provide a number of advantages and opportunities in the provision of public services:

A charity can be wholly focused on the provision of a particular service and does not have to compete against other more demanding services which may have been the case when the service was provided for by a public body;

A charity can attract funding from a variety of...