The UK’s charity sector was shaken up this morning as the government announced tough new restrictions on what public funds can be used for. The move follows a series of scandals involving charities, including the meltdown of Kids Company.

What seems to have pushed the government to act was a 2015 report by the Institute for Economic Affairs, a free market think tank, which highlighted the problem of what author Christopher Snowdon called “Government lobbying government”. The problem he identified was that many charities were receiving government grants, then using them to lobby for laws they favored – or even to lobby for more government grants.

Previous British governments haven’t made an issue of this; the Labour Party has a traditional close alliance with the “third sector” of charities and quasi-non-governmental organizations, and the Conservative – Liberal Democrat coalition in power from 2010 to 2015 was equally generous with funding. But with balancing the budget a priority David Cameron’s Conservative government has taken a closer look at the charity sector, and doesn’t like what it sees.

Kids Company disaster focused spotlight on charities

Cameron himself shares the blame for one of the most egregious abuses – Kids Company, run by flamboyant Iranian expat Camilla Batmanghelidjh. This organization managed to burn through an incredible £37 million in public funds between 2005 and 2015, and its eccentric boss enjoyed unlimited access to Cameron and his ministers.

However a 2015 police investigation into sexual abuse allegations blew the lid off a cesspit of fraud, waste and incompetence. It emerged that the charity was grossly inefficient, and Batmanghelidjh herself was a megalomaniac who admitted to blackmailing politicians for cash.

Kids Company brought the issue of state-funded charities into the limelight; Snowdon’s report went further, highlighting that many charities – better described as single-issue pressure groups – are using public funds to demand policies that don’t have public support.

Temperance, sugar tax and extreme forms of identity politics are causes that have benefited; small groups of obsessives can use government grants to make a lot of noise, creating an impression of public enthusiasm that doesn’t actually exist. The end result is the government paying people to pester it for unpopular laws.

New laws prevent AstroTurfing

Now it seems the government has had enough. Cabinet Office minister Matthew Hancock announced late on February 5 that from now on all grant agreements will explicitly forbid using the money to influence politicians, lobby for grants or agitate for new lawsand regulations. Hancock, echoing Snowdon, said, “Taxpayers’ money must be spent on improving people’s lives and spreading opportunities, not wasted on the farce of government lobbying government.”

Many charities rely on public donations and won’t be affected by the crackdown, but Snowdon has identified at least 27,000 “charitable” organizations that get 75% or more of their income from government handouts. The worst offenders include some of those who lobby most persistently for higher taxes, intrusive restrictions and more powers for charities.

Those groups are likely to have a lot to say about the new clause, but the government probably isn’t listening.

Hancock’s clampdown follows hard behind the execution of Smokefree Southwest. Set up to help smokers quit, this NGO chose to spend large sums of government money on campaigning for plain cigarette packs and subsidizing a website run by a Dutch private detective agency. Recently it also branched out into harassing drinkers – but on Friday morning it was told its funding had been pulled. Immediately they announced that they’ll close in June when current grants expire; apparently they’re under no illusions about the chances of getting volunteer donors to fund their activities. And with open season now declared on fake charities it’s unlikely they’ll be the last to close their doors.

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