• Law Family Commission on Civil Society publishes final report
• Landmark report calls for greater collaboration between the 3 sectors
• Commission says public, private and social sectors need to be ‘firing on all cylinders’ if the UK’s economy is to recover and grow from crises
• Report highlights 6 key areas identified by Commission research as vital
• Proposals include call for Treasury to invest £380mn in unclaimed Gift Aid into enhancing productivity of sector

A groundbreaking two-year commission exploring the potential of civil society in the UK has called for bold action on the sector by government, businesses and funders to help fuel much-needed national recovery and growth.

The Law Family Commission on Civil Society, chaired by former Cabinet Secretary Lord Gus O’Donnell, has proposed a range of policy recommendations and initiatives aimed at unleashing the full potential of the charity sector over the next decade - as the UK grapples with the social and economic consequences of the Covid pandemic and the current cost of living crisis.

The Commission, which marks the publication of its final report with a special event at London’s County Hall today (January 26), has outlined a raft of proposals focused on boosting collaboration between businesses, policymakers and civil society. The report concludes that economic growth and social progress in the UK is dependent on all three sectors – public, private and social – “firing on all cylinders and working effectively together”.

Lord O’Donnell described the UK’s charities and community groups as “a key part of the solution to every challenge we face” and pointed to their response to recent crises as proof of their importance, arguing they “make the difference between people eating or missing meals, being heard or left voiceless, and feeling alone or well-supported”. He lamented that no UK government had “committed to real partnership with civil society” since former prime minister David Cameron set out his ambition for a ‘Big Society’.

Reflecting on two years of research, the Commission’s final report, titled Unleashing the power of civil society, notes: “It is clear that civil society is integral to achieving both economic and social progress, and it already makes enormous contributions to both. But it is also evident that it could achieve even more.”

The Commission sets out a total of 26 recommendations, aimed at realising the full potential of the sector, around six key themes:

• Building productivity and organisational effectiveness. The Commission recommends a “radical shift” in approach from funders away from short-term and restrictive funding and towards support for core costs and investment in people, processes and organisational development. Among this set of initiatives is a recommendation to create a new Civil Society Evidence Organisation (CSEVO) to improve the availability and spread of evidence across the sector. Funding for these productivity-building initiatives, such as the CSEVO, should include drawing on the £380 million that the social sector currently misses out on due to unclaimed Gift Aid, according to the Commission.
  
  
• Creating timely, accessible data and robust evidence about the sector. The Commission says the sector and the government must work together to build on the progress secured over the course of the Commission's activity in relation to data collection, analysis and availability. This includes the Office for National Statistics (ONS) delivering on the Civil Society Satellite Account pledged in the Levelling Up White Paper.
  
  
• Improving the scale, distribution and impact of funding for the sector. As part of efforts to unlock the full potential of charitable giving, the Commission recommends the UK government appoint a full-time public official as its “Philanthropy Champion” and start a “’leveraging philanthropy’ drive” across Whitehall. It is also calling on the Financial Conduct Authority (FCA) to require financial advisors to receive training on philanthropy and impact investing, as part of its ESG and Consumer Duty responsibilities.
  
  
• Bringing businesses and civil society together. The Commission makes four recommendations aimed at fostering greater collaboration between business and the charity sector. The Commission stresses the need for “deep and genuine partnerships between charities and businesses” but says that too often relationships between the two sectors are “not sufficiently widespread” and “do not operate optimally for either side". It is calling on business and charity membership bodies to urgently form a partnership focused on raising awareness of the benefits of links among both businesses and charities, and creating opportunities for both sectors to come together.
  
  
• Strengthening relationships with policymakers. Charities and governments (both the UK government and devolved administrations) are urged by the Commission to create more opportunities for civil servants and charities to work together, through an annual ‘Chevening’ event for permanent secretaries and sector leaders, revised training for civil servants, and increased secondments and volunteering opportunities.
  
  
• Unleashing potential at local and regional level. Policymakers and civil society leaders locally and regionally should move away from fragmented individual relationships, often focused on procurement or funding, and create more strategic relationships with the social sector as a whole, according to the Commission. Among various recommendations for enhancing local and regional partnerships, the Commission notes that local authorities need the capacity internally to create and sustain relationships with civil society and this requires dedicated staff time and resources.
  
  

Lord Gus O’Donnell, Chair of the Law Family Commission on Civil Society (LFCCS), said:

“Successive governments have neglected charities for too long, and our country is the worse for it. That must change in order to achieve the national renewal and better future that the UK desperately needs, because charities are a key part of the solution to every challenge we face. Whether it is making our communities safer, greener, healthier, more prosperous or more equal, charities must be at the decision-making table and operating at their optimum level if we are truly to achieve the change we need.

“Yet it has been more than a decade since David Cameron set out his ambition for a ‘Big Society’, and longer since a UK government committed to real partnership with civil society. In that time, no UK political party has set out and stuck to a real vision for civil society. This failure of vision is also a failure to understand the reality of how vital this sector has become. As both the cost of living crisis and the pandemic have shown, charities and community groups make the difference between people eating or missing meals, being heard or left voiceless, and feeling alone or well-supported.

“The charity sector has grown to employ almost 1 million people in this time, but it faces real challenges in meeting the demands that are now placed upon it. There are fewer people giving regularly to charity, including the growing pool of highest earners who are earning more but giving less. Formal volunteering has stagnated. And the way that the funding system for charities works has left holes in charitable provision in some of the places that need it most, as well as disincentivising investment in skills, digital and the infrastructure that allows charities to have the greatest possible impact with the limited resources that they possess.

“The Law Family Commission on Civil Society is now calling on funders and governments to invest strategically in the productivity of the charity sector, the data available to and about it, and in the changes needed to unlock greater giving. There is money available for this, not least in the £380mn of Gift Aid which goes unclaimed each year. Alongside this investment, there must be a dramatic acceleration in the partnership between civil society and business and a reset of the relationship between civil society and government. With this investment, acceleration and partnership, civil society’s full potential can be unleashed. Without it, the UK simply cannot hope to recover and grow from the economic and social crises of the past decade and more.”

Baroness Valerie Amos, Labour Peer and LFCCS Commissioner, said:

“Charities and community groups play a unique role as trusted service providers and advocates. When people are disaffected with local authorities or social services, it is often charities and community groups they turn to for help. Charities have the flexibility, empathy and speed of delivery that enables them to find and put in place the innovative solutions needed.”

James Timpson, CEO of Timpson Group and LFCCS Commissioner, said:

“There are many examples of businesses around the UK that do brilliant work with civil society, whether it be through community outreach programmes, employee-supported volunteering or simply the donation of much-needed funds. But there is no doubt that businesses of all shapes and sizes can and should do more.”

Professor Dame Nancy Rothwell, President and Vice-Chancellor of the University of Manchester and LFCCS Commissioner, said:

“Good data can make the difference between success and failure. In health, good data regularly makes the difference between life and death. In the social sector, better data could help drive a revolution in service delivery and social impact in our communities.”

Read the full report