Tag: reserves

Scots charities forced to draw from reserves despite funding stabilisation 

New research from SCVO outlines the state of the sector’s finances

Charities across Scotland have continued to draw on their reserves “unsustainably” despite funding from government staying relatively stable, new research shows.  

The Scottish Council for Voluntary Organisations (SCVO) has published its latest research, State of the Sector 2024, which shows the challenges which organisations across Scotland continue to face.  

The paper, which contains key figures and trends from the Scottish voluntary sector, shows funding from government has stayed relatively stable, while income from the public has to a large extent recovered after being hit hard by Covid. 

Unfortunately, for many voluntary organisations inflation and expenditure rises have matched and outpaced these hard-won gains. 

While most organisations were able to stay in the black, the margins are wafer-thin and there has been a steady rise in the numbers of organisations ending the year with a deficit. In 2023, 45% of charities spent more than they managed to generate. 

These narrow margins and rising deficits have seen charities continue to draw on their reserves unsustainably while they try to identify new sources of funding or have to consider reducing services – link to Reserves doc and Tracker. 

SCVO also published a review of Scottish voluntary organisations’ financial reserves, which found the value of the funds looked after by the sector fell by £1billion between 2021 and 2023. 

The average value of funds held by large charities fell by £5million, from £17m in 2021 to £12m in 2023. 

Half of medium and large charities now have less than six months expenditure in reserves and nearly 1 in 3 large charities has less than three months of expenditure in reserves. 

Ilse Mackinnon, SCVO Research Officer, said: “It’s been sobering looking at charities’ accounts this year and seeing just how tight finances are for many. People have been telling us via the Tracker and anecdotally that things are tough, but it’s another thing seeing the figures in black and white.   

“It’s great that many income streams have recovered but we also saw essentials like energy bills, rents and staff costs shoot up, sometimes to double what they were the previous year.  

“We can see the impact of that on reserves, with many charities struggling to meet costs and keep enough cash back for emergencies.” 

Lammermuir Festival faces future challenge head-on as Creative Scotland turns it down for funding

Lammermuir Festival has been turned down by Creative Scotland’s Open Fund for funding towards this year’s festival.

Over a period of 40 weeks the festival lodged three applications having been strongly encouraged by Creative Scotland officials to re-apply twice. 

Each application was strongly recommended for funding by the Music Department at Creative Scotland, particularly as a key part of a network of festivals across the country including East Neuk, Paxton, Cumnock Tryst and St Magnus.

Each application has been turned down by assessment panels, the last notification being on 22 August, just 16 days before the 2023 festival opened.

Statement on the future of the Lammermuir Festival from the Chair and Trustees:

The Chair and Trustees of the Lammermuir Festival are appalled and saddened at the lack of investment in the 2023 festival by Creative Scotland. The Times described the Lammermuir Festival as “an indispensable part of Scotland’s musical culture”.

It has indisputably been a huge success over the past 14 years, giving pleasure to audiences from East Lothian and further afield, transformative experiences for people young and old through our community engagement, and presenting Scottish and international performers with worldwide reputations in beautiful and intimate settings across the county. 

Presenting the Festival in its current form has relied on a strong, supportive audience; our loyal Friends, Benefactors, sponsors and other generous funders; and investment from public funds, mainly Creative Scotland but also contributions from EventScotland and East Lothian Council. 

In previous years ticket revenues, private sector funders and public support have contributed about one third each of the cost of the Festival enabling us to keep ticket prices at a level to allow the widest audience to attend the performances.

If Creative Scotland had invested the sum requested in 2023 it would have represented 23% of the Festival budget. This is crucial investment in an area of Scotland which does not have regular high-quality cultural events drawing audiences to the area. In 2022 the Lammermuir Festival generated £780,000 of economic benefit for East Lothian (Source: MKA Economics, November 2022).

Public support has in addition allowed children and young people from across the county to discover and develop musical skills and benefit socially from participation in music. Most recently this brought almost 700 people together in our community opera and engagement work, giving them the experience of every aspect of production as well as performing.

This year Creative Scotland has declined to support the festival despite having encouraged us to re-apply twice over the last nine months.

Reasons given were first: prioritising applications with activity earlier in the year; second: Fair Work; third: Equality, Diversity and Inclusion. This third application was refused on a criterion which the Music Department assessor judged to be fully met. We are urgently seeking clarification on how this could be. 

The artistic ambition and quality of the festival has been consistently recognised in Music Department assessments.

In particular there has been no recognition that what has emerged is effectively a decision by Creative Scotland to give no priority to a festival as significant as Lammermuir, despite its record of achievement and its obvious appeal to audiences and performers; and no attempt is made to justify this. 

This flies in the face of the expressions of support for culture in Scotland, and in particular for festivals, that have been made in recent days by the First Minister, Neil Gray and Angus Robertson.

To deliver this year’s Festival as planned – with what is already being acclaimed as an outstanding artistic programme – we shall be obliged to use a significant proportion of our reserves which we have judiciously built up over many years. 

Thankfully on this one occasion we were in a position to do this, allowing audiences to once again enjoy beautiful music in beautiful places as in previous festivals, and meet our commitment to artists.

Without Creative Scotland support the Lammermuir Festival’s future is under threat.

We urge Creative Scotland to reconsider their decision and secure the future of Lammermuir Festival. In order to make plans and commitments for 2024 and beyond we need the financial stability which Creative Scotland has provided over the past 13 years. 

We are determined to save the Lammermuir Festival for the future.

From the Chair and trustees of Lammermuir Festival