I was struck by an editorial in the Senscot Bulletin by Laurence Demarco, a seasoned observer of the Third Sector world of NGOs, social enterprises and charities. Noting the irony that Oxfam’s safeguarding polices are amongst the best in the field, he saw the deeper problem as being one of scale and ethos. Increasingly, charitable enterprises have had to adopt the practices of corporations. With it, too easily, their priorities go “drifting from moral leadership to the ruthless financial demands of survival.”
The social commentator Gerry Hassan observed similarly in a blog last week. Big charities have not been immune from the world around them. They too have been drawn, he said, into “the cult of leadership … the prevalence of managerialism, and the adoption of modern business practice.”
I have found myself toying with these points less in terms of sexual ethics, as in the wider picture of what’s happened to the Third Sector over the past half century. Present times are brutal for poverty-related organisations. We’re scrabbling to survive, to keep some semblance of our programmes on the road. This climate of cold comfort has not come from nowhere. It has form, a long gestation. I’m not an economic historian. My grasp of politics is cursory. But in trying to make sense of present times, and in discussions with voluntary sector colleagues, I’ve jotted down some thoughts on how we got here. I’ve asked myself, what happened to the post-war dream.
Third Sector and the Post-War Dream
A third of a century ago, in 1984, I co-authored a first British book of its kind, Marketing: A Handbook for Charities. I had been working as a VSO volunteer in Papua New Guinea (PNG), engaged in teaching and appropriate technology. I’d come back, signed up for the new MBA course at Edinburgh University, and went on to adapt some of the material to the voluntary sector.
It was an era when old-style charitable amateurism was rightly under challenge. In PNG, they’d speak about the 3-Ms of the white man’s world: the missionaries, the mercenaries and the misfits. Back home, charity was very often therapy for the middle classes. Retired colonels and titled gentry chaired the fundraising committees. Ladies cut both ribbons and the sandwiches. Whether misfits, or missionaries, the “in” buzz phase was “increasing managerial professionalism”. That meant going cap in hand to learn a few tricks from the mercenaries.
Looking at the Third Sector today, looking back and asking how we got to where we are, it set me thinking of the drivers and their wider contexts. Living in Glasgow, I see co-workers and beneficiaries reeling with concussion at what’s happening to the poor. I see organisations built to cooperate having to compete for shrinking funds. What’s playing out is more than just the wild vicissitudes of outrageous fortune. What’s playing out are bygone social choices. I emphasise, I’m not an economic historian, but here’s a broad brush of how I see what’s happened from a ground-eye view.
In the post-war years of the twentieth century, from the late nineteen forties to the nineteen seventies, there was a general sense of Britain being a mixed-economy social democracy made up of three sectors. The First Sector or the public sector, government and its agencies of policy, applied taxation to sustain the fabric of the community.
The Second Sector or the private sector, industry and commerce, represented corporate and individual enterprise. As Adam Smith had always presumed, but later politicians failed to register, it played out its activities on land, resources and social basis of the wider community. Taxation and an acceptance of regulation was the price paid for that privilege, all working for the common good.
Then there was the Third Sector – the voluntary or not-for-profit sector, the NGOs, charities, cooperatives, faith groups, trades unions and other civic bodies. During the relatively optimistic 1960s to at least the mid 1970s, the Third Sector saw itself increasingly as being at the cutting edge of social change.
From Manknell Doctrine to the Bullock Report
Britain was on a trajectory of continuous improvement. As The Beatles said in 1967, “It’s getting better (Better)/ A little better all the time (It can’t get no worse).”
The Third Sector saw itself as being in the vanguard. In the 1970s the Dundee Association of Social Services had a formidable director, Miss Shirley Manknell. I vividly remember her doctrine. She used to say:
“The voluntary sector’s task is to fill gaps in social welfare until the government catches up.”
Once that happens, the sector could move on to the next most pressing issue.
That was still the generation of recovery from the Second World War. Bombed-out sites were built on. Cities redesigned. Social policy had a relatively clean sheet. Music played with sounds not heard before. Sex had recently been invented, and Britain was at last laying down the violence, if not the mythology, of its empire. With currency decimalisation in 1971 and entry into the European Economic Community in 1973, we were adapting to become like any other progressive peace-time European nation.
However, behind that urbane façade, Britain’s three-tiered feudal structure that had been set going by the Norman conquest remained in place. Not until 1956 had British Railways abolished Third Class travel. Second Class has now been renamed Standard Class, but First Class still reminds us of the pecking order, lest we forget.
As such, and as E.P. Thompson reminded us, the English working classes had not come from nowhere. It had been a question of The Making of the English Working Class (Gollancz 1963), a southern echo of Tom Johnston’s earlier, A History of the Working Classes in Scotland (Forward 1929). Whether through the Enclosures, or through the Lowland and Highland Clearances, the urban poor had been, to a considerable degree, “made”, and for some their inter-generational poverty a birthright and a birth-rite.
The war had paved a way for a degree of social leveling even if it carried with it blind spots of a victor’s arrogance. The health service came in, inheritance taxes escalated in the 1960s, and there was comprehensive schooling. But the structural poverties of the social class system remained hidden in plain sight. Whereas other European countries, most notably Germany, developed works councils to deepen worker participation, British industry dragged its feet. Relationships between workers, bosses and government deteriorated as the glue of war dissolved.
The OPEC oil crisis of 1973-1974 weakened the country, and the coal miners’ strike that came in on the back of it led to the power cuts and the imposition of a three-day working week between January and March 1974. Ted Heath’s Conservative government fought but lost the 1974 election on the theme of “Who Governs Britain?” The incoming Labour Party promised the conciliation of a Social Contract between government and workers.
Part of this was that in 1975, Harold Wilson’s government set up a Committee of Inquiry on Industrial Democracy. Its clumsily worded terms of reference were:
“Accepting the need for a radical extension of industrial democracy in the control of companies by means of representation on boards of directors, and accepting the essential role of trade union organisations in this process to consider how such an extension can best be achieved … to analyse the implications of such representation for the efficient management of companies and for company law.”
But the resultant Bullock Report (as it was called) of 1977 was ill-received by industry chiefs and shareholders. Meanwhile, as wages rose under the Social Contract, so did inflation. Industrial relations festered, and in 1979, Margaret Thatcher swept to power with a confrontational approach to labour relations and a deregulatory approach to social policy. Added to that, 1981 saw the election of Ronald Reagan in America. Old style British conservativism was now turbo-powered with US neoconservative “Reaganomics”.
Thatcher and the Rise of Reaganomics
Reaganomics was a version of free market economics – also known as libertarianism or neoliberalism. That, in the sense of a “new-freeing-up” of labour, markets and the transnational flow of capital. This was freedom for the Second Sector, for industry and commerce. De-regulating labour would strip away what capitalists – the owners of capital, shareholders and bond-holders – perceived as restrictive union policies and government regulations.
The stripping away of “red tape” and successive “bonfires of the quangos” would “get government out” of the people’s hair. The abolition of currency exchange controls in 1979 would allow production to be moved abroad where labour costs, environmental and other protections would be lower. The British working classes would be shown their place. Like turkeys listening to rich farmers, they might even vote for Christmas.
A Conservative Party catchphrase of the 1970s had been “Freedom of choice”. It sounded good, but was in practice an assault on the fabric of the commons and community. For sure, we were told, the gap between rich and poor would widen. But the cake would grow. Cutting taxes, privatising pensions, selling off council houses and stripping regulation away from banking and financial services would allow “rational” players in free markets to optimally allocate resources. The poor would be enriched by crumbs from off the table of this “trickle down economics”. Its critics called it Voodoo economics. It showed no understanding of the psychological wounds created by an ever-more-unequal society. But the stock exchange was rising. And house prices were rising. And in the 1980s “alcopops” came in to woo the younger drinkers.
New Labour to the Bank Collapse
In the second half of the 1980s, after another stint in Papua New Guinea, I found myself as business advisor to the Iona Community, its head offices then based in the Pearce Institute in Govan. The effect of Mrs Thatcher’s policies were brutal on the poor. Part of my job was appeal to Brussels. The Strathclyde Regional Council had a specialist funding unit. Thanks to its European liaison officer, Norman McGrail, I was able to secure considerable assistance from such sources as the European Regional Development Fund and the European Social Fund. The experience of those times is partly why, I think, the Third Sector in Scotland remains so much pro-Europe.
1997 saw the end of the eighteen year run of Conservative governance with the election of Tony Blair’s New Labour. From the late 1980s, Scotland’s civic energies had pounded in to the devolution agenda. Under the Labour government, the noughties brought in nearly a decade of resurgent public funding for the Third Sector. It was a period of renewal, as it were, of the Manknell Doctrine. During this era the professionalisation of charities continued apace. Scottish charity law was reformed and the Office of the Scottish Charity Regulator (OSCR) came about in 2003. Meanwhile, many charities that had been established as old-style trusts had regrouped themselves as companies limited by guarantee.
The upside of such taking on of a corporate structure was that it gave trustees protection from potentially unlimited liability. That mattered in an increasingly litigious age. The unintended consequence, was that it further pushed the professionalisation of the sector in ways that required more and more, well, professionals.
Middle class skills were needed to comply with reporting and compliance requirements. I know of one charity, and I’m sure there’s many others, that started off with only one middle class person on its board. Today, it has only one person who is not middle class.
Why? Because “corporate governance” now rules. Strength of governance is, for very understandable reasons, a pivotal requirement of funders, from the Big Lottery downwards. These, in turn, are driven by good practice, but also, by a weather eye on the front page of The Daily Mail. It means that an effective board needs strong skills in such areas as finance, law, personnel, PR and marketing. These are middle class skills, and sometimes bring into a board a middle class culture that can leave the grassroots thinking, “nae fur the likes o’ us.”
Austerity as Victim Blaming
New Labour was a neoliberal hybrid. It built on and tweaked, but failed to transform, some of the ratchet measures of Thatcherism. It didn’t help that other developed countries went down similar paths. The neoliberal project had become normalised, until October 2008, when the banks collapsed.
So it was that Gordon Brown’s Labour government succumbed again to Conservative rule in the 2010 general election. While some nations, most notably Iceland, made the rich pay for their misdemeanors, that was not the choice of Britain. Britain played the card of victim blaming. Austerity squeezed blood from out the public sector, and paled the faces of the poor.
In Scotland, some of us saw independence as a way forward. It never would have been a quick-fix panacea, and in the end, was not as yet to be. In England, years of drip-feed hatred by an oligarchic press had fed a xenophobic nationalism. Brexit means that even European funding paths are closing down. Furthermore, there is evidence, at least amongst environmental charities, that UK grant-giving bodies, based mainly in the south, are looking up at Scotland but deciding charity begins at home.
Meanwhile, child poverty and homelessness is escalating. We are seeing a reversal of the Manknell Doctrine. The Third Sector is having to step in where the First Sector, under lobbied pressure from the Second Sector, has abdicated. What few funds there are to address poverty are the target of more and more desperate organisations whose more structural funding sources have dried up. Oxfam was one of those that used its influence to sail as closely to the law as possible to lobby. Many inside commentators think that such explains the relish by which certain sectors of society have greeted its shortcoming.
The truth is, many of us are not coping. Look at our balance sheets. Look, even, at the fact that three bodies were pulled out of the Clyde in separate incidents on a single day last week. You can’t put one and one and one together to make four, but many folks in Glasgow suspect poverty as a factor in the background. If you live along the banks of Glasgow’s river, you know the kind of reasons why they jump.
Austerity is meanness canonised. God knows with what upcoming effects on mental health, and on our children’s future. Corporations and the rich may think they have a right to rule the world. But they don’t. That’s just a buccaneer’s philosophy. Businesses are granted rights, or charters, to use the land and its resources in the framework of community. Many respect and treasure that. They’re the members of the family. Others must be told they have no right to rip the fabric of community for selfish gain.
As I write, I think about a Pink Floyd track, “The Post War Dream”:
“Should we shout, should we scream
‘What happened to the post war dream?’
Oh Maggie, Maggie what have we done?”
I think also of another Pink Floyd track from that era, a track on Atom Heart Mother called “Remergence”. From whence might come our re-emergence? We’re working on the answers here in Scotland, but we need to deepen traction.
We need history to show us who we are, and vision that can show us what we might become. That’s why we need to bring to consciousness the forces that have shaped us. And then, perhaps, “remergence” from the atom heart; as Neil Gunn said, The Atom of Delight.