THE decision by Northern Rock to reduce the percentage of its profits that it donates to its charitable foundation needs to be looked at in the light of what other organisations are doing to support the community in these times of austerity.
At least one other major investment bank has announced that it is reducing its charitable donations whilst at the same time considerably increasing its bonuses paid to staff, an institution considerably larger than the Northern Rock and somewhat more profitable.
The support business gives to the community will undoubtedly come under pressure in times of difficult trading conditions and, at the risk of being accused of cynicism, such times can be used as a convenient reason to withdraw support.
Much of the donations made by business goes to third-sector organisations ... the same ones the Government wants to provide services that were previously the responsibility of Government and funded by the taxpayer.
This is part of the “we are all in this together” philosophy and no bad thing as business should always be prepared to put something back into a community from which it derives its profits.
The third sector is already under pressure from cuts by Government for the services it provides, often to those in need and usually at a much lower cost than the State can deliver and this double hit may see the demise of many charitable groups.
The private sector and voluntary sector are expected to create the jobs that will be needed to take up the fall-out from public-sector cuts.
Yet often the contribution that the latter makes to employment levels is not only overlooked but not even considered as a major part of our economy. So, if we really are all in this together, the Government needs to take a lead and not only encourage business to maintain its support of the community but also to take a more radical approach.
Why not a compulsory levy, of perhaps 2% of profits, to go to the third sector? Not a figure that will threaten the survival of businesses and one which many already surpass.
The cumulative effect will be marked in the provision of help to those in need provided that we do not see yet another quango set up to administer the funds. That would go towards creating employment but probably little else!
An opportunity for the Government to be radical and caring? Possibly, but business does not have to wait for politicians to act, it can make that difference immediately.
Bill Midgley is a North East business executive