Tag: Fair Funding

Short-term funding cycles are creating financial instability for Scotland’s charities, says Holyrood Committee

SCVO: Fair Funding needed now more than ever

  • Calls come as Holyrood Committee publishes report on public funding to voluntary organisations

Short-term funding cycles are creating financial instability and diverting time and resources away from charities’ delivery of services, according to a pre-Budget report by the Scottish Parliament’s Social Justice and Social Security Committee.

At the outset of the Committee’s inquiry the Scottish Council for Voluntary Organisations painted a stark picture of the challenges faced by charities in Scotland, identifying a 2.1% real terms decrease in Scottish Government funding in the previous budget, against a backdrop of increased inflation and high demand for services.

In recognition of the critical role charities play in supporting Scottish society, the Committee’s report calls on the Scottish Government to look at options to prioritise three-year-funding and include provisions for inflation-based adjustments.

During the inquiry, witnesses raised concerns about inconsistency, complexity and a lack of transparency in the application process for funding. In response, the Committee’s report recommends that the Government, and its partner grant awarding-bodies, streamline and standardise application processes and improve the transparency of the grant-making decision process.

The Committee also heard about the challenges some charities have faced because of delays to funding decisions and payments, issues the Committee wants the Scottish Government to resolve.

Bob Doris MSP, Deputy Convener of the Social Justice and Social Security Committee, said: “The Scottish Government has a commitment to provide fair funding for the essential work done by Scotland’s charity sector.

“We make it clear in our report that this commitment should be recognised in the upcoming budget, so that the sector’s vital work can be safeguarded. We call on the Government to prioritise strengthening its approach to multi-year funding and improving its processes.

“Whilst we acknowledge the Scottish Government’s ability to agree to multi-year funding when it does not know what funding it will receive from the UK Government for subsequent years, our committee has made practical suggestions to overcome these challenges.

“We believe that implementing the straightforward measures outlined in our report, including multi-year funding, could positively impact the effectiveness of a sector that does so much to help so many.”

Responding to the report, Scottish Council for Voluntary Organisations (SCVO) Chief Executive Anna Fowlie said: “I welcome today’s report, and the committee’s recommendations. Throughout their inquiry, the Committee heard from witness after witness of how the practice and culture around public  funding for voluntary organisations is broken.

“Too often and for too long voluntary organisations providing vital services to people and communities across Scotland contend with budget cuts, short-term funding cycles, late payment, incoherent decision-making, poor communication, inadequate grant management and more. That must end. 

“The voluntary sector needs a funding landscape that is fair, flexible, sustainable, and accessible – as long-advocated by SCVO and recommended by the committee today. 

“At a time when many voluntary organisations are facing extreme financial difficulties, these long-standing calls are more essential than ever. 

“The prize is a sustainable sector, strong public services, and resilient communities – one the Scottish Government must grasp with both hands.”

The Committee report:

sp-third-sector-funding-principlesDownload

Fairer Funding for Voluntary Sector: Little progress one year on

In April 2023 the Scottish Government committed to fairer funding by 2026. Despite the urgent need within the voluntary and charity sector – one year on there has been little progress.

SCVO’s SHEGHLEY OGILVIE sets out #SCVOPolicy on #FairFunding and what actions are needed:

Last month, after a discussion a few weeks ago with the Clerks of the Social Justice and Social Security Committee, SCVO received the very welcome news that the Committee would focus their Pre-budget scrutiny on voluntary sector funding.

The Committee want, “to examine how the Scottish Government’s approach to fair and efficient funding can contribute to the continued effectiveness of the third sector”, having heard about the funding challenges facing the sector.

SCVO encourage organisations across the sector to respond to the Committee, share experiences of good and bad practice, and support SCVO’s Fair Funding calls.

The inquiry is very much needed.

For almost a decade, the Scottish Government has recognised the need for multi-year funding, committing to longer-term funding for the voluntary sector across multiple government strategies.

In April 2023 the Scottish Government’s policy prospectus New leadership – A fresh start, the Cabinet Secretary for Social Justice, Shirley-Anne Somerville MSP committed to achieving fairer funding by 2026:

“Working with my Cabinet colleagues, I commit that by 2026 I will have… Progressed Fairer Funding arrangements, including exploring options to implement multi-year funding deals, enabling the third sector to secure the resilience and capacity it needs to support the transformation and delivery of person-centred services for Scotland’s people and support our thriving social enterprise economy”. 

A commitment welcomed by SCVO and organisations across the sector. Similar commitments followed in the Programme for Government (PfG) and the Scottish Budget.

Despite this renewed focus – and the urgent need within the sector- one year on from the policy prospectus, there has been little progress.

Our sector faces unprecedented challenges. Years of underfunding and poor funding practices, and crises such as the pandemic, and the cost-of-living crisis have put the sector under increasing pressure, exacerbating financial and operational challenges – 76% of organisations now experience financial challenges, while the number of organisations reporting that rising costs are having a negative impact on their ability to deliver services continues to grow.

To support voluntary organisations, our staff and volunteers, and the people and communities our sector works with, the Scottish Government must both take action and develop timelines and goals to monitor progress towards fairer funding.

SCVO defines Fair Funding as a long-term, flexible, sustainable, and accessible approach to funding.

To make meaningful progress towards Fair Funding the Scottish Government should:

  • Commit to a longer-term funding model for the voluntary sector across all Scottish Government departments. 
  •  Define multi-year funding for voluntary organisations as a three-year minimum commitment. 
  • Record progress by collecting and publishing what proportion of grants and contracts are delivered on a multi-year basis and accommodate other essential Fair Funding elements. 

To be meaningful and support a sustainable sector, multi-year funding must also recognise and incorporate other essential Fair Funding elements including: 

  •  Flexible, unrestricted core funding 
  •  Inflation-based uplifts 
  • Timely notification and payments
  • Full costs recovery, which includes core operating costs. 

As local councils fund far more voluntary organisations than Scottish government- between a quarter and a third of voluntary organisations receive funding from local authorities- mulit-year funding should also be provided to local authorities, to allow them to enter into multi-year agreements with voluntary organisations. 

Our sector is an employer, a partner, and a vital social and economic actor central to delivering the Scottish Government’s aspirations.

To recognise and support the many contributions of voluntary organisations, their staff, and their volunteers across Scotland urgent progress is needed or the goal of achieving fairer funding by 2026 becomes increasingly unlikely.

As part of the Committee’s Pre-budget scrutiny inquiry the Committee will hold two workshops in Dundee on Wednesday the 21st of August for voluntary organisations who receive funding from statutory funders (such as Scottish Government, health boards, local authorities).

To register your interest contact: PACT@parliament.scot

Find out more about SCVO’s Fair Funding work here: 

https://scvo.scot/policy/fair-funding-procurement/fair-funding

Find SCVO’s engagement with the Scottish Budget process here: 

https://scvo.scot/policy/fair-funding-procurement/budget

Scottish Government funding: How’s it working for you?

SCVO FAIR FUNDING SURVEY

Is your voluntary organisation expecting funding from the Scottish Government in the forthcoming financial year?

Get involved with our quick and easy research survey to help us understand your experiences of timely funding notifications!

Learn more: https://bddy.me/49rh9JW

If you don’t have the time (or the desire!) to read this blog in its entirety – just read this: we are looking for voluntary organisations who are expecting funding from the Scottish Government in the forthcoming financial year to take part in a quick and easy monthly survey for six months. To get involved, contact details can be found at the bottom.

If you do have time to read the whole blog – here’s a bit more on why we’re doing it:

At SCVO, we’ve been working hard over the last couple of years to build our Fair Funding asks in response to what the sector has told us. We’ve also been putting a lot of time and effort into taking those asks to parliament. A result of that has been the Scottish Government’s commitment to Fairer Funding by 2026 and, although that remains largely undefined at present, some additional commitments have filtered out since.

One of those commitments relates to funding notifications. We know that timely decision making, and subsequent issuing of funds, is crucial to ensuring no organisation is disadvantaged by the funding process.

When decisions and notifications are delayed, organisations are plunged into uncertainty which can have hugely negative impacts on their ability to deliver services, retain staff, and plan ahead.

And so, as part of our Fair Funding package, we have been asking the Scottish Government to ensure funding decisions are issued no later than December and funds paid no later than the start of the tax year in April.

We were encouraged, then, when Colin Smyth MSP submitted a written question at parliament at the end of November, asking “what action it is taking to ensure that its funding decisions regarding support for the voluntary sector are issued no later than December, and that any funds are paid no later than the start of the tax year in April”. 

The fact that we had not had prior contact with Colin would suggest that our Fair Funding calls, with the support of sector organisations echoing those calls, are very much landing with MSPs.

But even more encouraging was the Scottish Government’s response: “We understand that organisations need timely grant decisions and payments in order to reduce financial uncertainty and effectively resource delivery,” the Cabinet Secretary said. 

“In line with the commitment given by the First Minister, we are working, within the context of the Scottish Budget process, to issue notifications of funding arrangements to third sector organisations, as soon as is practicably possible and no later than end of March for funding beginning on 1 April.”

With that in mind, we are keen to track the experiences of voluntary organisations who expect to receive funding from the Scottish Government this coming financial year.

We’re looking to build a group of such organisations to participate in a monthly survey, beginning in a few weeks and running for six months. The survey itself will be quick and easy to complete, the results gathered will be kept entirely anonymous, and your participation will allow us to document the journeys of organisations between February and July this year in terms of the relevant correspondence and notifications they are receiving from the Scottish Government.

In July, we will then hopefully be able to congratulate the Scottish Government on realising this commitment on timely notifications. Alternatively, if that is not the case, we will have the statistics that will allow us to hold the Scottish Government to account and to demand that Fairer Funding genuinely does incorporate this and many other of our Fair Funding asks in future.

If your organisation is awaiting notification from the Scottish Government on funding for the forthcoming financial year and you’d like to participate in this series of surveys, or you would like a little more information, please get in touch with Jason Henderson at: jason.henderson@scvo.scot