UK Civil Society Almanac 2024

In 2021/22, government remained a key income source for the voluntary sector. However its share declined to 26% of total income, from 30% in 2020/21.

Government income includes funding from:

• central government departments
• local authorities
• devolved and regional government
• the NHS
• European and international governments.

Most government funding comes in the form of contracts, which made up 74% of total government income. The remaining 26% came from grants.

Income from government made up a quarter of the sector's income, of which three-quarters was contracts.

In 2021/22, government income dropped to 26% of total income, from 30% in the previous year. This reversed the increase in government income seen during the height of the pandemic, when government income rose from 26% of total income in 2019/20.

Since 2000/01, government income had been increasing until the financial crash in 2008/09. It peaked in 2009/10, at 37% of the sector’s income at the time, and then steadily declined until 2019/20, down to 26% of income.

Between 2020/21 and 2021/22:

• government contracts fell from 77% of total government income to 74%
• government grants increased from 23% of total government income to 26%.

Central government income has remained fairly steady in recent years, although it fell slightly as a proportion of total government income to 48% in 2021/22 from 51% the previous year. Income from local government was more stable at 44% of total government income.

Central government departments were the largest source of income. In 2021/22 they provided 48% of total government income. This was a small decrease from the previous year (51%). Within this, funding income from the NHS rose slightly as a proportion of total government funding, to 12% from 10%.

Local government contributed 44% of all government funding, this was fairly stable from the previous year (43%).

European and international government income contributed 8% of all government funding, up a little from 6% the previous year. Within this, foreign governments contributed 4% of all government income (up from 2%).

Larger organisations continue to dominate when it comes to government income:

• Major and super-major organisations (income over £10m) received 61% of all government income.
• Medium and large-sized organisations (income between £100,000 and £10m) received 35% of total government income.
• Micro and small organisations (income below £100,000) received just 4% of government income.

Government funding represents a significant portion of larger organisations' overall income:

• 26% of medium, large, major and super-major organisations’ income came from government, compared to 37% for micro and small organisations.
• This means that while less government funding in total goes to the smaller organisations, they are more dependent on this income for their survival.