Tag: financial challenges

Finances proving biggest challenge to charities as rising costs bite

 Research also found a third of organisations were dipping into reserves

An overwhelming majority of charities in Scotland have reported financial challenges as their biggest source of concern. The Scottish Third Sector Tracker has found 7 in 10 charities cite financial challenges as their biggest challenge, up significantly in just two years. 

Data from the tracker observes the emergence of the sector from the Covid-19 pandemic through 2021, followed by the development of the cost-of-living crisis and associated organisational concerns during 2022 and 2023.  

Throughout the waves of research, the frequency with which organisations have reported financial challenges has hugely increased, and in the most recent data collection (April 2023), these were the most frequently reported challenges (71%), compared to just less than half of respondents (47%) just two years ago.  

It is concerning that a third of organisations reported having made use of their financial reserves in the 3 months leading into April 2023, an increase compared to the same period in 2022.  

Almost half (44%) of the organisations using their financial reserves believed that this situation is unsustainable. 

Anna Fowlie, Chief Executive of the Scottish Council for Voluntary Organisations (SCVO), said: “Charities, community groups and social enterprises can be financially fragile at the best of times, and the Tracker research clearly demonstrates that we are currently far from the best of times.

“We are seeing that voluntary organisations are experiencing more financial challenges now than they did during the pandemic due to rising costs, particularly of energy and wages.  

“Voluntary organisations make an invaluable contribution to Scotland’s social and economic fabric and the people, communities and causes they support are experiencing more pressures than ever before. Public giving of money and time have been hit by the cost-of-living crisis and we are seeing many organisations having to dip into their reserves just to keep going.

“Reserves are there as a safety net and are not meant to prop up business as usual. It’s akin to households having to buy their groceries on a credit card, simply storing up more problems for the future and threatening their medium to long-term viability. 

“Everyone can play a part in supporting the sector, whether it is government and councils ensuring there is fair and sustainable funding in place, philanthropic funders investing their money wisely and the public giving when they can.

“A good start would be Scottish Government passing on the money that the UK Government allocated for energy bills relief to see charities through the winter months.” 

The Scottish Third Sector Tracker is a growing research community made up of representatives from third sector organisations based across the whole of Scotland, who are willing to share their experiences, views and concerns as the sector faces both new and ongoing challenges. 

The Tracker is run by an independent research company called DJS Research on behalf of SCVO, the Scottish Government, the William Grant Foundation and the National Lottery Community Fund. 

Those involved in the running of a third sector organisation operating in Scotland are invited to represent their organisation as a member of the Scottish Third Sector Tracker. 

An Executive Summary of the Scottish Third Sector Tracker’s First Phase of research can be found here:

https://scvo.scot/policy/research/evidence-library/2023-scottish-third-sector-tracker-waves-1-to-6-executive-summary 

Tough decisions: Scottish Government publishes financial strategy

Plan to grow economy, target spending and deliver progressive tax system

Economic growth, progressive taxation and spending plans that unapologetically target those in greatest need are at the heart of a financial strategy announced by Deputy First Minister Shona Robison.

The Medium-Term Financial Strategy outlines the approach to ensuring Scotland’s finances are on a sustainable footing and delivering high-quality public services in the face of high inflation. This includes:

  • growing the economy, including by delivering on ambitious commitments on childcare, seizing opportunities in areas where Scotland has a competitive advantage and supporting entrepreneurs, start-ups and scale-ups
  • taking tough decisions around spending, focusing on what is needed to achieve the missions of equality, opportunity and community
  • updating the tax strategy, with a new advisory group to be established this summer and chaired by the Deputy First Minister

The strategy details the tough choices required in challenging financial circumstances. Scottish Government estimates indicate that due to inflation, pay increases and the lack of further funding from the UK Government, current resource spending requirements could exceed funding by £1 billion in the next financial year, and by £1.9 billion in 2027-28.

The gap between capital spending commitments and funding could rise to 16% in 2025-26.

Ms Robison said: “We are steadfast in our commitment to tackling poverty, building a fair, green and growing economy, and improving our public services to make them fit for the needs of future generations.

“But we must recognise that our current financial situation is among the most challenging since devolution, driven by the Covid pandemic, the war in Ukraine and the recent period of high inflation.

“Our funding remains largely based on decisions made by the UK Government, but they have failed to take the steps required to inflation-proof our budgets, and their decisions from Brexit to the disastrous mini-budget have made matters worse. This is creating substantial pressure on our public services, which we have no choice but to address.

“Today I have outlined our strategy for managing these challenges, doing all we can within our powers to ensure public finances are on a sustainable path. We will have a laser-like focus on spending, ensuring it targets equality, opportunity and community.

“We will generate economic growth, supporting businesses to invest and create new jobs while increasing tax revenues to invest in better public services. And we will continue to build the most progressive tax system in the UK, ensuring the burden of taxation is placed on those with the broadest shoulders.

“There can be no escaping the difficult choices ahead, but by following the plan outlined today we can provide a more prosperous and fairer future for the people of Scotland.”

Responding to the statement, STUC General Secretary Roz Foyer said: “The Cabinet Secretary for Finance is in a slightly better budgetary position than was predicted this time last year. However, she rightly points out that UK Government austerity and its manufactured cost-of-living crisis continue to hit Scotland hard.

“However, this is not an excuse for inaction. There is a worrying lack of ambition from the government ministers which cannot be condoned.

“Tax reform cannot be kicked down the road for another year. To protect services and pay, the Scottish Government must make good on the First Minister’s pledge to leave no stone unturned in seeking to raise additional income by rebalancing wealth. This means committing now to the policy changes required to introduce wealth and property taxes as the STUC has advocated.”

The Deputy First Minister’s statement to the Scottish Parliament

Urgent support needed to avoid a pet crisis across Edinburgh the Lothians

 

“Following my recent visit to Edinburgh Dog and Cat Home (EDCH) in Seafield, I attended their parliamentary drop-in session yesterday supported by animal campaigner and TV Presenter Kirsty Gallacher at the Scottish Parliament (writes FOYSOL CHOUDHURY MSP).

“CEO Lindsay Fyffe-Jardine and her Team at EDCH have been doing tremendous work to alleviate pet poverty across the Lothian region and beyond, ensuring pet owners are not separated from their families.

“Many pet owners across Scotland have been struggling to keep their much beloved pets at home as they can no longer pay for food, heat and vet bills particularly with the cost of living crisis which has exasperating the situation post-Covid.

“This has been very traumatic for cat and dog owners whose pets are part of the family, providing them with joy, comfort and security.

“Edinburgh Dog and Cat home Pet Food Bank launched in 2019, provides pet food, jackets, blankets, leads, collars, bowls and bedding to those who can no longer afford their pets’ needs or care for them properly due to financial difficulties, an illness, homelessness or other social issues.

“It is important that we raise awareness that these Pet Food banks do exist and are there to support pet owners when needed. To guarantee pet supplies are available, EDCH has partnered up with 88 human food banks and has been supporting over 3,800 pets each month across the Lothians, Fife, Falkirk and The Borders.

“However, The Edinburgh Dog and Cat Home has been struggling with the rising costs-of-living. CEO Lindsay Fyffe-Jardine reached out to me at the end of last year to make me aware of the significant challenges the Pet Home has been going through due the rising costs.

“In November last year, the Home was hit with a huge increase in annual electricity and gas costs– equating to £130K of unanticipated funding that Lindsay has been desperate to find. This is an addition to £200K needed to cover increased supplier costs.

“These increases are just unsustainable in addition to coping with the increase of pet owners having to give up their cats and dogs. Lindsay informed me that the phone calls are increasing 7 days a week, with calls up 55% from December to January.

“The energy and cost increases are just exasperating an already struggling pet home, and animal charities like EDCH do not have the option to turn the lights and heating off. They have pets who need their care and rehabilitation as well as staff who need them to care for them while they carry out their mission both on the Home’s site and right across East and Central Scotland.

“EDCH has been working to exhaustion point to avoid a major pet crisis, keeping our communities together, making sure our pets are cared for and assuring owners can keep their pets to avoid the trauma of losing their beloved pet. We all know how our pets play a central part within our family lives, they give many who would find themselves completely lonely and isolated company and a reason to live for.

“In the past months, I have raised questions to the Scottish Government regarding the impacts of the cost crisis on pet ownership and I will continue to put pressure on them to ensure our pet homes avoid the prospect of closing.

“Our local animal shelters like EDCH need our support and we need to see practical action beyond donations to ensure the survival of this 140-year old animal shelter to keep our animals safe and sheltered, and avoid painful separation from their owners.”

“If you are able to donate, donations can be made on Donate – Edinburgh Dog & Cat Home (edch.org.uk)”.

Audit Scotland: Integration Joint Boards ‘face significant workforce pressures and financial challenges’

Scotland’s Integration Joint Boards (IJBs) face considerable financial challenges and immense pressures on their workforce, says public spending watchdog Audit Scotland.

IJBs have reached the point where significant transformation will be needed to ensure the long-term capacity, financial sustainability and quality of services individuals receive.

IJBs plan and commission many community-based health and care services. Demand for these services is increasing, in part due to demographic change and support for people with increasingly complex care needs.

The number of care hours for those aged over 65 reached nearly 25 million in 2021/22. The proportion of care services reporting vacancies increased by 11 per cent to 47 per cent, with a 30 per cent turnover of staff each year.

Most IJBs underspent on providing services in 2021/22. This was largely because of difficulties in recruiting staff, which led to unplanned vacancies, and pandemic-related reductions in service provision. The reductions in service provision were likely to have contributed to an increase in unmet health and social care needs.

In 2021/22 IJBs returned significant surpluses, with reserves doubling to over £1.3 billion. This was mainly due to additional funding received late in the year for specific policy commitments, including Covid-19. The Scottish Government are currently exploring options to recover around two-thirds of the unspent Covid-19 money held in reserves.  

Across Scotland, IJBs have a combined projected funding gap of £124 million for 2022/23. 

To be financially sustainable in the longer-term, IJBs must reduce their reliance on reserves. All IJBs must put in place detailed plans that clearly show how they will achieve the needed ongoing savings on a recurring basis and support urgently needed service transformation. 

William Moyes, Chair of the Accounts Commission said:  “Change is needed now – it cannot wait for a National Care Service. Action is needed to tackle funding pressures, which are under increasing stress from rising demand and cost pressures.

“The workforce challenges are considerable, with mounting unmet need. 

“We need to see services focus on prevention, with appropriate funding in place to transform the way services are delivered and to improve lives. “

Local government organisation COSLA agrees.

COSLA Health & Social Care Spokesperson, Councillor Paul Kelly, said: “Today’s report from Audit Scotland is concerning and highlights the enormous pressure our health and social care infrastructure is under.

“People across Scotland rely on vital health & social care services every day, and it is critical that there is meaningful investment in the system which ensures their long-term capacity.

“We must ensure focus remains on front-line service improvement and sustainability, rather than the bureaucratic structural change presented through the National Care Service Bill.”

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Day-to-day living spirals down for families with disabled children

As winter approaches, families with disabled or seriously ill children face dauntingly grave financial challenges, according to latest research findings.

In its latest poll, national charity Family Fund shows how prospects for the families it supports continue to worsen, as they grapple with the ever-rising cost of living for day-to-day needs. 

As the UK’s largest grant-making charity for families raising disabled and seriously ill children, on the lowest incomes, Family Fund provides essential goods and services to families including kitchen appliances, clothing, bedding, play and sensory equipment and much-needed family breaks.

Last year, it delivered over 170,919 grants and services, worth over £37 million, to families on low incomes across the UK.  

The charity’s Cost of Caring report, published last month for the first time, showed deteriorating conditions for families with disabled and seriously ill children. The report covered four quarterly polls in the year that followed the pandemic.

However, the latest quarterly poll, from September this year, shows an ever worsening picture, with families facing hunger and spiralling debts as they struggle to meet the needs of their children.

Families face a triple whammy of sky-high costs on top of severely reduced incomes, due to intense caring responsibilities and three-times-higher costs to look after a disabled child.

Over 70% of parents and carers report not being able to work at all, or as much as they want to, because of the care their children need, a post-pandemic reduction in support services for children, and parents being furloughed and living on reduced benefits.

Cheryl Ward, Family Fund’s Chief Executive Officer, said: “Our latest figures show that families with disabled and seriously ill children continue to face daunting financial challenges, which are worsening as winter approaches. 

“The majority of families who have been supported by Family Fund have shared with us how they are struggling to cover mounting debts and worry constantly about how they are going to clothe and feed their children, fund transport for medical appointments and heat their homes.  . 

“We are doing everything we can to support families whose costs are already three times higher to care for, and raise, their disabled children than costs for other children. We urge families who need support with urgent and essential items this winter to go to our website (Family Fund) to see if we can help them.”

Key findings from latest quarterly poll with UK families raising a disabled child or young person:

Impact on households:

  • average household income for families has fallen by over £660 in the last 12 months;
  • almost 60% of families (59%) report an increase in household bills of more than £100 a month;
  • 9 in ten families report they are struggling or falling behind on household bills (92%);
  • one in five families (21%) say their debt levels have risen by more than £1,000 in the last 12 months;
  • nearly 80 per cent of families (78%) have no savings to fall back on;
  • 75% of families say they would not be able to save £10 a month;
  • 58% have cut or skipped meals;
  • 40% have gone hungry because there was not enough money for food;
  • 48% are cutting back on energy;
  • over one third (35%) of families are cutting back on transport costs;
  • over one third (31%) of households said they have gone without carpets because they can’t afford them;
  • 11% have gone without a cooker or fridge;
  • 23% have gone without curtains;
  • 20% have gone without beds;
  • 27% have used a food bank;

Impact on disabled children:

  • 63% of families have cut back on play and recreational activities with their disabled child;
  • 31% are cutting back on toys or sensory toys for their disabled child;
  • 16% said they would like fresh fruit or vegetables every day for their disabled child;
  • 10 % said they would like a warm winter coat for their disabled child;
  • 76 % said their disabled child’s health and wellbeing had declined in some way over the last 12 months.