New NCVO analysis shows impact of cuts on charities

Public funding for charities could be 12% lower by 2017/18, according to new analysis from NCVO. The forecast suggests public funding for the sector could be £1.7bn lower in 2017/18 than it was in 2010/11, the latest year for which data is available.

NCVO’s ‘Counting the Cuts’ analysis uses Office for Budget Responsibility forecasts of public spending and NCVO UK Civil Society Almanac data on charities’ income sources to estimate the impact of reductions in public spending on charities.

Future reductions in public spending are likely to be concentrated among departments which are key sources of income for charities – with local government expected to be particularly hard hit.

If these cuts are passed on proportionately to charities, the sector’s income will be £1.7bn (12%) lower in 2017/18 than it was in 2010/11, using 2010/11 prices. If cuts to charity contracts and grants are disproportionately large, as evidence from Compact Voice’s survey of local authorities in England suggests they have been, the reduction could be as much as £2.1bn (15%).

Commenting, Sir Stuart Etherington, chief executive of NCVO, said:

‘Charities deliver high quality, professional services. When their expertise is lost it can be hard to regain.

‘Our analysis suggests that charities delivering local public services are most vulnerable to forthcoming public spending reductions. Of course, whichever charities lose funding, it is people and communities who lose services and support.

‘It is of the utmost importance that local commissioners engage fully with charities in their area and think creatively about how to manage the issue of declining resources. The voluntary sector excels at innovation and adaptation, so local authorities must embrace its ideas in order to best serve their communities.

‘Large new payment-by-results programmes offer some opportunities for the sector but it is important that these schemes are structured so that they suit charities of all sizes.’

Notes

The Counting the Cuts Report is available here (PDF).

NCVO champions and strengthens the voluntary sector, with over 10,000 members, from the largest charities to the smallest community organisations.
www.ncvo-vol.org.uk

 

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