William Shawcross’s comments earlier in the week, following the disclosure that the number of staff at foreign aid charities earning salaries greater than £100,000 a year has grown from 19 to 30 since 2010, caused consternation. The leading article in this week’s Spectator makes two points on the subject.
1). The expansion of the DfID budget has coincided with the growth of executive pay at charities, just as the expansion of the health budget under Blair and Brown coincided with the growth of staff pay in the NHS. Criticism of salaries should never be motivated by envy, but neither the charitable sector nor the NHS has provided adequate results to justify such salaries. HIV and malaria are yet to be eradicated. Mid Staffs is neither an exception nor a distant memory.
2). Emboldened by cash and a political department in their name, some charities have become highly politicised. There is nothing wrong with political debate, but it does raise questions about charities’ privileged status in our tax and public spending systems. As the Spectator notes:
‘In no case is this more obvious than Save the Children, whose chief executive, former Gordon Brown aide Justin Forsyth, was paid £163,000 last year. Established in 1919, Save the Children once had a clear purpose: to improve survival rates for children in poor countries. Not once, during the Spanish flu, the Great Depression or the second world war, was the charity moved to extend its activities to Britain — until, that is, last autumn, when it launched a campaign called It Shouldn’t Happen Here. The campaign claimed that 1.6 million British children were growing up in ‘severe poverty’, and featured a video purporting to show some of them talking about their lives. It was soon rumbled: the children had been played by actors. It was little more than a crude political campaign against government cuts, conducted by a former Labour aide and paid for by well-meaning donors, many of whom perhaps had African children in mind when they dropped their coins into Save the Children’s collecting boxes.
‘…The Charity Commission needs to look beyond excessive pay. It needs to ask whether charities deserve to keep their tax advantages if they are principally involved in political campaigning, or whether the tax breaks should only be available for specific activities such as feeding the hungry or saving the hedgehog. Political debate is always welcome, and no one would wish to gag the chief executives of charities if they take exception to a government policy. But the favoured tax status offered to charities must not be exploited and donors must not be misled. Above all, the government needs to revisit its target for 0.7 per cent of our national income to be spent on aid. As with every other area of government activity, it would be remarkable if more could not be achieved at substantially less cost.’
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