Charities too dependent upon the state, says UK thinktank

Some of the UK's largest charities are so heavily dependent on state funding that they risk becoming offshoots of the government, according to a report on the voluntary sector.

The report, Transparency Begins At Home, from the centre-right thinktank Centre for Policy Studies (CPS), reveals that almost 25% of the income of the 50 largest charities, or more than £3bn, comes from the state.

The report states that this income consists of "grants and fees", rather money from tax breaks charities are entitled to.

However, the report says that due to charities not disclosing their income clearly, the figure could be as high as £6.5bn – or just under half of all their income.

The report cites well-known charities as massive recipients of government income including Action for Children, the Leonard Cheshire disability charity, and Royal Mencap – saying that the latter receives 90% of its income from the government.

A criticism of this situation is that the public is donating twice over to these charities, as taxes are already contributing to the charities. But the CPS has other concerns.

The author of the report, William Norton, says that dependency on large amounts of government funding can affect charities' independence. "Ultimately they are dependent upon someone having made a political decision in their favour,'' he said.

"Ultimately they are dependent upon someone having made a political decision in their favour,'' he said.

He also points out that too much government funding can change the nature of a charity. "At some point does the organisation cease to be a private body? More fundamentally does it cease to be a

"At some point does the organisation cease to be a private body?" Norton asks. "More fundamentally, does it cease to be a charity?"

Charities are believed to have become more dependent on state funding over the last decade because they are providing more services to government departments through contracts. The Charity Commission has announced that from this year charities will have to distinguish between

The Charity Commission has announced that from this year charities will have to distinguish between grants for core funding from government and fees for services. The CPS is not satisfied with the stringency of current reforms in charity accounting and is calling for greater transparency over the level of income charities receive from government.

The CPS is not satisfied with the stringency of current reforms in charity accounting and is calling for greater transparency over the level of income charities receive from the government.