Mary Craig: Cutting cash to charities would be a big mistake

If it's not, David Cameron is kidding himself on – and he's kidding us if he wants us to believe that delivering vital services can be done on the cheap. It can't, which is precisely why organisations like the Lloyds TSB Foundation for Scotland exist.

I know how important our role as a grantmaking trust is – just ask any one of the hundreds of charities we've supported since we were founded in 1985.

I also know that the charitable sector in Scotland has rarely been more needed.

Many charities rely heavily on local authority support, but as councils feel the strain they are less likely to give grants to the voluntary sector, and tend to defer decisions on funding for charities until the very last minute.

That has put many charities in a limbo. They are unable to plan ahead and cannot develop long-term programmes to help their clients. Some are even unsure if they will survive. The consequences of charities crashing for want of public funding don't bear thinking about.

What's more, restricting cash to charities is a false economy. The voluntary sector is pretty good at making a pound stretch far. It's also good at preventing some of the problems encountered by disadvantaged people becoming a serious strain on the public purse.

Of course, charities must adapt to the changing environment. By improving their monitoring and evaluation, they can better demonstrate the impact of what they do – and therefore make themselves more likely to attract funds.

But if the Big Society means anything it is that we're all in this together. And that means the public sector must not turn its back on the third sector at a time when it's needed most.

• Mary Craig OBE is Chief Executive, of the Lloyds TSB Foundation for Scotland