Open letter to the chancellor on vital funding for public services delivered by charities

Dear Chancellor,

We write to you with, and on behalf of, the many voluntary organisations across the UK that are commissioned to deliver vital public services for communities.

This Autumn Statement we are urging you to address the continued underfunding of contracts and grants. This underfunding is putting many charities at crisis point, and communities at risk of losing essential services.

This is not a small-scale problem. Charities deliver £16.8 billion worth of services on behalf of government. They bring their specialist knowledge and commitment to enhance communities – from early interventions that prevents family breakdowns, crime and homelessness, to employment support programmes, to social or sexual health services.

Communities need these services more than ever due to the impact of the pandemic and cost of living crisis. While the £76 million for urgent cost of living support is a lifeline for charities providing emergency support, it does not help charities delivering other fundamental services that are essential for our society to function.

The government has relied on charities to deliver these vital services for many years without giving them the necessary resources to do this. Most charities’ grants and contracts do not cover the true cost of delivery. This is not a new problem, but it is being made significantly worse by increasing inflation and the rising cost of delivery.

The National Council for Voluntary Organisations has conducted new research on the scale of this issue, and the results are alarming. 73% of charities say they cannot meet the current demand for the public services they deliver with the funding they receive.

A further 40% said their grants or contracts never covered the true costs of delivery, and 44% said their costs had not been covered since at least 2020. Since April 2021, almost half of charities said they had not received any uplifts to the value of their grants and contracts to meet the rising costs of delivery.

The knock-on effect of this underfunding has forced charities into crisis. The options are bleak – charities will either stop operating completely, cease delivering much needed services or use charitable funds, including already stretched reserves and donations, to subsidise public services.

This is unsustainable. Many are stepping away from delivering public services altogether because they can no longer afford to do so. This means people and communities are not getting the support they need.

We urge you to increase long-term funding to public bodies to ensure public service grants and contracts cover the true cost of delivery. Furthermore, public bodies must be required to uplift all existing and new grants and contracts.

We all know this winter will be tough, but it will be catastrophic if the very lifelines that people rely on are withdrawn. Now is the time to act to ensure charities can be there for people when they need them the most.

Yours sincerely

Sarah Vibert, Chief Executive Officer, NCVO