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Charities should prepare for difficult financial year, warns NCVO

  • NCVO’s Road Ahead advises charities to prepare for another financially challenging year
  • A combination of Brexit uncertainty, tight government budgets and a slow economy will continue to add pressure on beneficiaries and front-line services
  • NCVO’s annual PEST analysis of drivers for the sector provides food-for-thought for charities preparing for 2019  

The ongoing negotiations on a withdrawal deal will continue to create an uncertain economic environment, making accurately forecasting the UK economy difficult, the 2019 edition of NCVO’s future-gazing report series, Road Ahead, predicts. It highlights growth predictions from the Office for Budget Responsibility of just 1.6% for this year, significantly lower than many of our European counterparts.

Charities are cautioned to be aware that a weak pound, high inflation and declining investment in the UK leave the economy fragile. Despite record jobs growth, the report highlights that the average pay packet remains £11 a week lower in real terms than before the financial crisis.

Those who rely on benefits will also continue to feel their disposable income squeezed over the coming year, with the ongoing benefits freeze leaving low-income households predicted to be more than £200 worse off in 2019 compared to last year. The Road Ahead warns that the environment this leads to could have bleak consequences for some beneficiaries, and charities delivering services such as debt relief, housing support and foodbanks are likely to see demand continue.

Research shows that spending in English councils fell 19% between 2009-10 and 2017-18. While Phillip Hammond said last October’s that ‘austerity [was] finally coming to an end’, the actual funding levels for local and central government remain to be seen with the results of the government’s Spending Review, expected between April and November this year.

Paul Winyard, senior finance analyst at NCVO, said:

‘The uncertainty around Brexit makes it difficult to accurately predict where the UK economy will go over the coming year, although most experts remain downbeat about the short-term prospects. While government finances have somewhat improved since last year’s Road Ahead, limited growth and existing spending commitments made by government mean pressure on voluntary sector funding and support is likely to continue for the foreseeable future.

Karl Wilding, director of public policy and volunteering at NCVO, said:

‘I hope trustees and senior managers will use Road Ahead as a tool to reflect on how the wider environment will impact their own organisations, so they can feel prepared for what 2019 might bring.’

Other highlights in the report:

  • What the divisions within the big political parties mean for charity campaigners
  • The importance of social connections and the rise in public and political interest in social isolation and loneliness
  • The rising popularity of ‘tech for good’ and its place in the government’s recent civil society strategy

The Road Ahead full report is free for NCVO members. 

Non-members can see a summary of the report

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