The Silicon Valley transport app Lyft recently launched a new service, calling it ‘Shuttle’. The new service differs from a taxi service in that passengers “walk to a nearby pick up spot, get in a shared car that follows a pre-designated route, and drops you (and everyone else) off at the same stop.” The new scheme has rightly been laughed out of the room by anyone vaguely in connection with reality, for being nothing more ‘disruptive’ than a bus.

These tech start-ups and the hype that surrounds them often make an easy (and satisfying) target for such ridicule. But similar scorn is surely deserved for some elements in the contemporary voluntary (charity, third) sector, too. A crowdfunding scheme called Space Hive is currently being experimented with in certain boroughs, whereby the public pitch local community projects, through a central online hub. The public and other funders all chip in what they can afford, and the money, with the public’s input, goes to the pitches that receive the most support. Tesco’s Bags of Help Scheme is another such crowdsourced community funding platform.

Ostensibly, these projects are perfectly nice and there is nothing obviously wrong with such a method of funding local community projects; they are generally overlooked and assumed to be basically harmless. But there is something sinister behind this community-minded veil. Schemes like this are the living embodiment of the near-forgotten Big Society project, set up by David Cameron. They are a libertarian fantasy (or, perhaps more appropriately, dystopia) in embryo - a privatised form of a local authority, with what is effectively privatised funding. Of course, it is not advertised in this way. The buzzwords of ‘consultation’, ‘engagement’ and the like cloud the reality that, following endless re-structuring, cuts, and with third sector organisations having to justify their own existence, we have arrived in a position where the third sector’s role is undermining the case for fully-funded, free at the point of access public services. How we got here, the third sector’s role in the privatisation of community resources, and ultimately what Labour in government should do about it, is the subject of this piece.

The context of austerity has aggravated and deepened a state of complicity in neoliberalism endemic within the third sector. This has been characterised principally by the outsourcing of what were previously public services to the third sector, almost exclusively to the lowest bidder. Alongside this we have the complicity in punitive local authority measures, from charities set up supposedly to ameliorate the worst excesses of state and market brutality. A horrifying instance of this came to light earlier this year when it was revealed that Thames Reach and others had been referring homeless clients who also happened to be migrants to the border agency, thereby deporting them, and defending this practice as reasonable given that: “…when returning home is the only option for a vulnerable individual sleeping rough, we have to ask ourselves what would happen if we didn’t get involved.” But what happens when they do get involved? If such a position is so authentically harmless, you have to wonder why it took several FOI requests to have the information published.

Equally problematic is the acceptance of orthodox economic thought as a reality to be accepted, not a dogma to be challenged, within charity sector groups. A case in point of this latter tendency can be found in Shelter’s recent attempted take-down of Labour’s rent control proposal; a dismissal that is drenched in the most conformist and neoliberal of assumptions about market behaviour, namely that “old fashioned controls – setting the rent, not just controlling the increase – would force a significant number of landlords to sell their home, as they could make more money that way.” This is a depressingly familiar sentiment. There are serious methodological problems with Shelter’s stance, principally the fact that it is based on market conditions from decades ago, that it treats housing as a supply and demand issue, and that it doesn’t compare Labour’s proposals with places where rent controls are actually, currently, in place. However, this stems from a more fundamental problem: the ideological assumption that any meaningful intervention in the market – that is, one that confronts class power - will necessarily result in a net negative for the poor, with no critical inquiry or advocacy surrounding what to do about it, other than to tinker and work around an economic system that, fundamentally, simply cannot be challenged. Shelter, like many housing charities, has shifted from advocate of new societies to defender of ‘best practice’ within the society we’ve got.

The way in which ‘volunteering’ has manifested itself under the Big Society is particularly disturbing. Libraries faced with closure in certain parts of England, where they were not outsourced to sub-par private providers like Carillion (inevitably to be brought back in-house, resulting in an overall cost for the councils) instead ended up sacking all of their full time staff, only to be run near-exclusively by volunteers. The volunteers staffing these libraries have often been referred to the library by the job centre, as a condition for receiving a certain form of social security such as Employment and Support Allowance (ESA), recipients of which have been deemed unfit for work but under certain instances must perform a ‘work related activity’: that is to say, they’ve been referred under duress from the state, and therefore, involuntarily.

A particularly absurd instance of this sort of austerity volunteers’ roundabout appears in food banks, also staffed by volunteers, who in my experience are often themselves recipients of food vouchers issued by the job centre and their local third sector providers. Someone loses their benefits, and therefore has to use a food bank, and in order to get some form of benefit back, ends up volunteering at that same food bank. All of this is facilitated by third sector-run volunteer centres, health programmes, ‘self-help’ schemes, skills and employment projects, and so on. When you hear of third sector organisations speaking of ‘peer-to-peer’ volunteering or ‘peer-supported’ learning, what they actually are quite often referring to is this utterly degrading form of being both a service user and a volunteer, in this case: preparing a food parcel for yourself. The end game here is what Mark Fisher called ‘the privatisation of stress’, and the third sector has been instrumental in creating this institutionalised form of victim blaming.

None of this is helped by the bureaucratic processes that have come to define a third sector project, particularly their reporting stage. Key performance indicators, and the entire business of ‘capturing impact’, ‘measuring outcomes’ and so on, are case studies in the ludicrousness of neoliberalism as experienced in charities. Traditionally, there is a deep problem with quantitatively capturing social value. This is because the whole reason a social need exists is because it represents something unrecognised in market value. You might be so old fashioned as to think that the actual purpose of the voluntary sector is to address that which transcends market value, that ‘you can’t put a price on’ certain things like happiness, community, well-being and so on.

But some envisage a world in which we absolutely can put a price on these things, and that is exactly where the third sector in its current form is blindingly hurtling towards. The term for the new methodology of measuring outcomes, currently being taken up rapidly across the sector, is euphemistic – Social Return on Investment (SROI) – and it is a terrifying view into a society in which every blade of glass and every cube of air comes with a price. Through SROI, a third sector group can put an output through a matrix of potential and actual costs, and at the other end get a number representing the monetary value of that output. The immediate economic realpolitik, and its benefits, are obvious. If a funder, like a local authority, is being asked to prove why it gave this organisation this much money to deliver this service, having a means to demonstrate the return on that cost is invaluable to the potential expansion of a frugal charity.

Once we apply such a logic to the actual world, the ethical horror of it all becomes clear. What is the SROI of an ESA claimant going to the food bank to volunteer so that they may be eligible for ESA and food vouchers? Consider first and foremost what you would be paying this person if they were not a volunteer - at least £7.50 an hour. Multiply that by the number of volunteering hours they commit to each week, say 16 hours, plus the cost of tending to their health were they not able to have regular access to food, a cost at least in triple figures, and you’ll get an idea. Thinking of real people - who are beyond vulnerable - and their experiences in this way, and the potential consequences of applying this methodology to the entirety of society, ought to turn knots in your stomach.

This is before we even begin to consider the internal politics, or lack thereof, in third sector groups. Pay and conditions for the overwhelming majority of delivery level third sector staff is abysmal, with the good will of people exploited in order to commit to the completion of undeliverable projects, that have been commissioned based on bids without staff input, for the ends of nothing more than an increase in revenues for the charity, plus a rise in executive pay. An example of this tendency that is almost beyond parody: many youth workers on the National Citizen Service scheme, the flagship programme of the Big Society, are, depending on the delivering charity, on zero hours contracts.

Where is Labour’s place in all of this? The third sector problem, although currently shaped by Tory austerity, is not new and the blame for it cannot be easily allocated. Labour in government from 1997 was a champion of the third sector, viewing it as a perfect infrastructural match for its ideology. It is target-orientated, obsessed with expansion for the sake of expansion, and supposedly does not have the burdensome shackles of large, bureaucratic state institutions. Key performance indicators, the outsourcing of council services, the treatment of welfare recipients not as citizens with fundamental rights but as customers; these themes were all in full swing before the Big Society. They exist as attempts to paper over contradictions between capital and labour, as New Labour itself did. It is simply the case that under the Big Society, the sector has firmly and emphatically landed on the side of capital.

It’s easy to imagine two broad criticisms of all of the above. There is a glaringly obvious point that the third sector does not exist in a vacuum, that it has to re-orient its priorities and abilities according to the world within which it finds itself, and perhaps more complexly charities have to strictly appear ‘non-political’. If funders require measurable and monetary targets, then these ought to be presented to them, not fanciful or utopian declarations of social value or solidarity. The second, related criticism is that the overall effect of the third sector not doing the work that it does would leave pressing social need unaddressed. A stark version of that critique appears in Thames Reach’s defence of collaborating with the Home Office in relation to migrant rough sleepers.

Whilst most reasonable people will strongly believe that the responsibility for the political context in which the sector finds itself ultimately lies with the government, there are still basic moral considerations to which any organisation, charitable or otherwise, must adhere. The fact that any third sector group in the country accepted volunteers on ‘workfare’ and related schemes is simply wrong. Oxfam, hardly the most left-wing of NGOs, refused volunteers on workfare as a part of the laudable Keep Volunteering Voluntary campaign and stated very simply that “these schemes are not an effective way of tackling poverty in the UK”. Crystal clear and uncontroversial - if an organisation as high profile as Oxfam can rebuke the government on this matter, so can all of them.

This ties in with the second point, that on net effects. Yes, the net effect of third-sector organisations withdrawing co-operation from ‘Big Society’ schemes would risk an overall increase in unmet social need, at least until a progressive change of policy could be brought about. But I’d throw the guilt right back: what is the net effect of encouraging ESA claimants to volunteer? What is the net effect of monetising a community’s well-being? What is the net effect of defending the power of landlords because you’re scared what would happen if you challenged it? Sadly, we do not have to hypothesise. This isn’t to lay blame solely at the doors of councils or charities, but to point out that the situation is vastly more complex than the typically neoliberal arguments of working with ‘the hand you’ve been dealt’, that it’s ‘about what works in the real world’. If this is a system working, I’d hate to see one that’s broken.

Much like the private sector, the third sector has dramatically strayed from what it was invented for. By any reasonable estimation and notwithstanding however much goodwill and caring there may be amongst third sector teams, the sector, insofar as it should exist at all, should exist for added value, not for the core delivery of increasingly inadequate public services. This has to be the starting point of the next Labour government. If we wish to abandon neoliberalism as such, the third sector’s role in helping to perpetuate it - unconscious or otherwise - cannot be ignored.

Labour in government will then have the unenviable task of dismantling the third sector as we have come to understand it. That will mean committing to three broad themes. In the first instance, bringing commissioned services back in house at local levels, ensuring all delivery-level staff are allowed to keep their existing jobs under contract from the commissioning local authority, and setting as standard that all social value projects are best delivered at their core by the public sector. The argument that there are certain things the public sector can’t do, that the third sector is more flexible, less bureaucratic, less wasteful, falls completely flat if you begin to analyse how many third sector projects are actually delivered.

Secondly, Labour will have to force local government to take up responsibility for that which it currently neglects, most dramatically in housing, which has allowed a marketplace of third sector schemes to arise in the first place. Councils are currently permitted to divest themselves of any responsibility to a homeless family should the family refuse what it deems to be unsuitable accommodation, and it is to the third sector that these families are inevitably referred to. Aside from being morally repugnant, this is also, as we’ve now seen repeatedly, a roundabout of triviality. The argument is always about the availability of money, however it is quite often cheaper to keep services in-house, not least because some of the services that are brought back in house would not have to exist in the first place if public services in general were properly funded and staffed. There is a growing consensus that the existence of food banks specifically is ludicrous, and the celebration of the goodwill of food bank volunteers should not be allowed to cloud how disgraceful and shocking it is that the need for food banks is so pressing throughout the country. This logic is powerful; Labour must weaponise it.

Thirdly, and I’d argue most importantly, Labour will have to repeal the ‘gagging law’, as Jeremy Corbyn recently and rightly committed to doing, but it must go further and get rid of any and all related laws which limit the political independence of charities. There is no such thing as non-political. A huge component of why charities behave like businesses is precisely because the ‘social value’ to which they strive is a meaningless term without politics attached, therefore leading their projects to be purely utilitarian, which under neoliberalism will inevitably encourage quasi-business mentalities; ones that, as the increasing trendiness of SROI proves, are ever growing. If charities were free to lobby and campaign for political solutions to the problems they identify, not only would the public have a much more transparent idea of what a charity is actually about, but it would further force charities to think in terms of actual social value, one that confronts market value. Further, it would remove the incentive (or pressure, whichever way you see it) to operate as a business, expanding for the sake of it, divorced from any ties to radical moral reflection and thoughtfulness. Perhaps most valuably, repeals of laws like this would leave the government without an important fig leaf for their own failure to provide certain services.

It’s very easy within the paradigm of ‘British Values’ to be sympathetic to charities, and to regard any and all criticisms of them as heartless and inappropriate. This has to be resisted and thrown out for the bourgeois propaganda that it is. The charity model which has emerged in recent decades does nothing more than to undermine the case for political solutions to political problems. It is embraced by Tories for reasons which are inherently political - we would do well to reflect on them - and Labour must be unafraid of potential backlashes to confronting this fact. In 1920, Clement Attlee wrote that: “Charity is a cold grey loveless thing. If a rich man wants to help the poor, he should pay his taxes gladly, not dole out money at a whim.” While charities could again come to play a useful role as a social and moral conscience, it is exactly this view that has to guide Labour’s relationship with today’s heavily neoliberalised third sector. Labour in government will have to confront a voluntary sector that has enabled neoliberalism and austerity. In sum, we should not defend the neoliberal charity, we should nationalise it.