I showed in these reports that large sums of taxpayers’ money were being given to non-governmental organisations by central government, local authorities and the European Commission. It is undeniable that some of this money was being used to campaign for controversial legislation, regulation and taxation. In some instances, statutory funding made up 100 per cent of the organisation’s income.
This raises several questions. Is it ethical to force taxpayers to fund political campaigns with which they may strongly disagree? Is an NGO really ‘non-governmental’ when it relies on the state for most or all of its funding? And to what extent is civil society crowded out of the political conversation by this legion of quangos and state-funded pressure groups?
Insights from Public Choice Theory suggest that there is an ‘iron triangle’ of policy-making consisting of politicians, bureaucrats and pressure groups (think of Yes, Minister). Using taxpayers’ money to create and fund pressure groups can be seen as a way of politicians and bureaucrats taking control of the third corner of the triangle. It amplifies the voices of those the government wants to hear from and makes ‘civil society’ less unruly (from its perspective).
I have revisited the topic in research published today – Still Hand in Glove? – to see how the landscape has changed. There are reasons to expect statutory funding of politically active NGOs to have declined since 2012. Firstly because there have been budget cuts in many areas of UK government spending. Secondly because, since December 2016, contracts between central government and external organisations have specifically stated that grant money cannot be used for campaigning, advocacy and lobbying.
Billions of pounds are granted to third parties by the UK and EU governments every year. The sums involved are so large that it is almost impossible to conduct a full audit, but by revisiting the organisations studied in previous IEA reports, we can get a series of snapshots. In summary, it seems that there has been a decline in government spending on NGOs at the Whitehall level, with the exception of foreign aid charities which have benefited from David Cameron’s commitment to spend 0.7 per cent of GDP on international development.
At the EU level, it is a different story. Most of the organisations mentioned in my Euro Puppets report have seen their grant funding increase, and many of them continue to rely on the European Commission for most of their income. Environmental lobby groups have done particularly well.
The Scottish and Welsh governments have also continued to fund political advocacy organisations. In what I call the ‘nanny state blob’, groups like Alcohol Focus Scotland, Obesity Action Scotland and ASH Wales rely on taxpayers for most or all of their income. Despite bearing the brunt of budget cuts in recent years, many local councils are still able to find money for similar organisations, with the focus shifting from tobacco to food in recent years.
In England, the kind of activity described in Sock Puppets, in which state-funded charities and NGOs masquerade as citizens’ action groups, does seem to have waned, but this may be partly because the creation of Public Health England in 2013 made them redundant.
The tendency now is for activists to go from putative outsiders to overt insiders by joining wholly state-funded organisations such as Public Health England, the Obesity Policy Research Unit or the Tobacco Control Research Group which nobody could mistake for grass-roots organisations. Whilst this is an improvement of sorts, mutual back-scratching remains, notably in the green and nanny state blobs, which serves to exclude the most important stakeholder: the consumer.