Imaginative Catholics can help to secure a new civil settlement for our times, says Greg Clark

A few short weeks ago Catholic voluntary sector leaders gathered at Liverpool Hope University to debate how they might encourage a “deeper social engagement”, and enhance the Catholic community’s “culture of social responsibility”. Their deliberations took inspiration from the English bishops who had called for a “common endeavour” which would look outwards and seek to serve those most in need. Next week those Catholic leaders will gather again, this time in London, to take their discussions to the next phase. They do so at a time of huge opportunity for churches, faith communities and wider civil society to make a renewed contribution for civic improvement.

The Prime Minister’s commitment to social justice and decentralisation – to solidarity and subsidiarity – is long-standing. It draws on deep historical roots in Conservative tradition. More recently, it is informed by the writing of David Willetts on community, on the need for social justice by Iain Duncan Smith, and by a determination across the Coalition to pare back the bureaucracy that has smothered local decision-making in a thicket of guidance, targets, rules and regulations. We all know someone whose efforts to inspire, care or educate have somehow been stifled by paperwork.

Charities are at the heart of this vision, not least Christian charities so many of which are funded locally. Consequently, the principles of subsidiarity and solidarity are exemplified especially in how local authorities treat the voluntary sector. Councils which have had their eyes and ears open have known for years that the era of uncontrolled public spending could not be sustained. When we are spending approaching twice as much each year on paying the interest on our national debt than council tax raises in England, the reckoning was bound to come. Even Alastair Darling warned the public, as Chancellor, of imminent “deep and tough” cuts in spending. And as we all know, upon arriving in office we were left with a little note with a big message: “There is no money left.”

In these difficult circumstances we have worked hard to ensure that the adjustment required of councils is as sensibly fair as it could have been. We changed the formula we inherited to give relatively more help to areas of deprivation; we ensured a maximum reduction in spending power of no more than 8.8 per cent next year (with an average reduction of 4.4 per cent overall). This means, for example, that people in Hackney will receive £1,043 in central grant funding per head while those in Wokingham receive £125 per head. As a result, when this period is over the formula grant paid to councils will not be at the level it was 30 years ago in cash terms, but what it was as recently as 2008.

Given this spread of support there is no excuse for local authorities hitting the voluntary sector first and their own administration second. The best-run councils know this and are looking instead to strengthen their relationship with the voluntary sector.

We have gone further than this. We are providing a £100 million transition fund to help charities who have relied on central resources. Knowing that so many effective charities – especially Catholic ones – rely on legacies to sustain their cash flow, George Osborne in the Budget increased tax reliefs on assets left to them. New approaches to community empowerment and philanthropic action then are also being put in place. For example, churches and other charities can now claim gift aid tax relief on up to £5,000 of small donations annually without paperwork. But our public sector proposals have the potential to open up a new chapter in social reform, to secure a new civic settlement for our times.

When it reaches the statute books the new Localism Bill will give charities, mutuals and social enterprises the right to challenge to run any local service that they believe they can deliver more effectively and compassionately than it is at the moment. Michael Gove’s restructuring of education opens the door for dioceses, religious orders and concerned parents to build on their existing contribution to education and found new free schools and Academies. In health, I know that social enterprises are already responding to Andrew Lansley’s proposals to consider GP practices with distinctive priorities such as special outreach to the homeless and other vulnerable groups.

This is where the Catholic community in England may well find the most traction in deepening its social engagement: if we are de-monopolising the Government’s role in the common task of building solidarity are there not new pathways to be taken here? No doubt some will want to campaign and be involved in advocacy. Others will rightly see their priority as the poor of Africa, Asia and Eastern Europe. But, as we often heard during the papal visit, Catholics throughout the world are great founders of social welfare institutions. Indeed, research by Georgetown University shows there are more of these social welfare and educational bodies globally than there are parishes. These institutions can often be among the most innovative, ranging from social enterprises whose surpluses fund medicines otherwise not available, to arts and theatre centres with a powerful welcome to those who have been persecuted abroad, and on to hospitals, health centres and social services at the cutting edge of authentically personal support. I have often said that the best ideas normally emerge outside of Government and I now ask if there are specific outstanding ideas and models upon which charities might call from around the world in order to be able to respond truly creatively to the opportunities I have described.

This is by no means to overlook all that people of faith already do. I am aware that new research is being undertaken to assess just how significant that contribution might be in the English Catholic case. But now is the time to build on this. It will take bold ideas, approaches and energy from throughout society. Ideas that can be taken forward in the confidence that the government will be genuinely open to radical, ground-breaking initiatives.

It is a source of encouragement that, in Liverpool, Catholic voluntary sector leaders began the journey to a deeper social engagement. They are joined by those from the other faith communities and the thousands of inspirational individuals who want to make things work – to do more, with less – in tough times. Such aspirations are at the heart of what it means to be responsible citizens. This is a moment of huge opportunity. I look forward to the concrete results of the next phases of the conversation.