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.”
The Scottish Council for Voluntary Organisations (SCVO) is calling for voluntary organisations and the people who work and volunteer in Scotland’s voluntary sector to apply for its annual Scottish Charity Awards.
Now in its 19th year, the Scottish Charity Awards are designed to celebrate the best of the voluntary sector, and to highlight the incredible organisations, inspiring people and innovative projects that have made an immeasurable difference to the communities they support over the past year.
Applications are now being accepted for 2025, with SCVO placing particular importance on hearing from voluntary organisations and people that reflect the diversity of Scotland’s essential voluntary sector.
All registered charities, social enterprises, campaigning groups, community interest companies and people who work and volunteer in these spaces are eligible to enter.
Last year saw the success of attempts to make the awards simpler and more accessible to as many people and organisations as possible. This year, the Charity of the Year category has been refreshed to better reflect the make up of the voluntary sector, with three awards up for grabs for small, medium and large organisations.
There are eleven award categories at the Scottish Charity Awards. Seven recognise the achievements of organisations, and three recognise individuals. The eleventh award, People’s Choice, is chosen by a public vote from the finalists in the other eight categories.
The award categories are Charity of the Year (turnover under £100k), Charity of the Year (turnover £100-500k), Charity of the Year (turnover over £500k), Trustee of the Year, Volunteer of the Year, Employee of the Year, Partnership of the Year, Campaign of the Year, Community Impact, and Climate Impact; with the winners to be decided by a panel of judges.
All finalists will also be entered into the running for the People’s Choice Award, giving members of the public a chance to vote for their favourite finalist to win. SCVO received an overwhelming response last year with hundreds of applications and over 16,500 votes cast for the People’s Choice Award, and hopes that even more organisations will be inspired to apply this year.
This year, SCVO will be bringing its celebratory awards ceremony, hosted by Sally Magnusson, to Glasgow’s Radisson Blu on 19 June.
Anna Fowlie, Chief Executive of the Scottish Council for Voluntary Organisations (SCVO), said: “The Scottish Charity Awards are a highlight of my year. I never fail to be overwhelmed by the breadth and depth of what voluntary organisations achieve across the country – on all aspects of life in Scotland and beyond.
“Previous finalists and winners have told us how special it is for them to be recognised on the national stage. Every year we develop the awards slightly to keep them relevant. For 2025 there will be three opportunities to win Charity of the Year to recognise the huge variation in size of our members and the wider sector.
“So, whether you’re a wee grassroots organisation, run entirely by volunteers, a big multi-million pound charity or somewhere in between, there will be a space for you. Please don’t be shy – nominate or enter for this year’s awards.”
Harvey Carruthers, CEO Fife Young Carers, added: “Fife Young Carers were thrilled to be awarded SCVO Scottish Charity of the Year 2024.
“Throughout the year we have found that having received the award, the great strides that we know that the charity has made, have now been acknowledged by our beneficiaries, peers and supporters in a way that would be hard to achieve had we not achieved this recognition by SCVO.”
Applications are open until 12 noon on 7 March 2025 and can be completed on the SCVO website: scvo.scot/scottish-charity-awards/apply.
More than £60 million for pilot projects focusing on essential services and eradicating child poverty
A new Fairer Funding pilot to deliver on the Scottish Government’s top priority of eradicating child poverty will provide additional multi-year funding in the form of 45 grants to organisations across Scotland.
The funding, subject to budget approval, will support projects in areas including health, education, poverty and culture and have a total value of £61.7 million in 2025-26 and £63.2 million in 2026- 27.
Speaking on her visit today to the Gathering, the largest third sector event in the UK, Social Justice Secretary Shirley-Anne Somerville said: “I know many charities, faced with rising costs and falling donations, need more security and stability to enable them to plan and develop.
“Child poverty, in particular, requires longer-term interventions to help achieve the solutions we want to see. For that, the third sector needs financial stability and certainty. That’s why I have prioritised delivering on our commitment to provide more multi-year funding where we can to support the vital work of the third sector in Scotland, as part of our fairer funding approach.
“The pilot is the first step in mainstreaming multi-year funding agreements more widely across the third sector. It will give organisations the ability to plan for the future and make the most of their resources.
“The pilot’s focus on grants connected to tackling child poverty and the delivery of frontline services to our communities will maximise the impact of longer term funding and support the delivery of our number one priority, eradicating child poverty.”
Scottish Council for Voluntary Organisations (SCVO) Chief Executive Anna Fowlie said: “The voluntary sector has a crucial role to play in delivering essential services across Scotland that people and communities rely on.
Multi-year funding models are vital, providing security to voluntary organisations and, crucially, allowing them to get on and deliver for people and communities.
“We welcome the Scottish Government’s commitment to piloting multi-year funding for a range of voluntary organisations across Scotland – a first step, we hope, towards rolling out Fair Funding principles to voluntary sector funding.”
Organisations to receive multi-year funding for 2025/26 and 2026/27
Social Justice
Scottish Refugee Council
Scottish Empty Homes Partnership
Homeless Network Scotland
Housing Options Scotland
Poverty Alliance
CentreStage – Social Innovation Partnership
COVEY – Social Innovation Partnership
Flexibility Works – Social Innovation Partnership
Heavy Sound – Social Innovation Partnership
MsMissMrs – Social Innovation Partnership
Street Soccer – Social Innovation Partnership
WorkingRite – Social Innovation Partnership
MCR Pathways
Economy and Gaelic
Scottish Mountain Rescue
Constitution, External Affairs and Culture
Youth Music Initiative
Sistema Scotland
Health and Social Care
Cruse Scotland Bereavement Helpline
Penumbra Self-harm support pilots
BASICS Funding PHEC BASICS Scotland
The Listening Service Samaritans
Communities Mental Health and Wellbeing Fund for adults
Communities Mental Health and Wellbeing Fund Management
Autism Advice Line Scottish Autism
Young Scot Carer support funding
Active Play Development Programme Inspiring Scotland
Active Play Development Programme Actify
Community Food Networks Edinburgh Community Food
Community Food Networks Lanarkshire Community Food and Health Partnership
Community Food Networks Community Food Initiative North East
Community Food Networks Glasgow Community Food Network
Drugs Policy: Core Funding Scottish Families Affected by Alcohol and Drugs
Drugs Policy: Family Recovery Initiative Fund Scottish Families Affected by Alcohol and Drugs
Fetal Alcohol Spectrum Disorder FASD Hub Scotland Service
Finance and Local Government
Planning Aid Scotland
Education and Skills
Dyslexia Scotland
Children’s Advocacy for Children’s Hearings
Who Cares Scotland
Inspiring Scotland
Children in Scotland Enquire National Advice and Information Service on Additional Support for Learning
Scottish Book Trust Bookbug
Access to Childcare Fund
Scottish Association of Minority Ethnic Educators
Justice and Home Affairs
Victim Centred Approach Fund
Apex Scotland
Medics Against Violence
These pilots are in addition to the multi-year funding announced last week by Creative Scotland, which has been funded as part of a record £34 million uplift for culture in the draft 2025-26 Scottish Budget.
Scottish public sector and voluntary organisations have come together to raise concerns at the impact of the impending increase to employer National Insurance contributions.
Organisations from across civic society in Scotland have backed a letter to the UK Chancellor of the Exchequer, Rachel Reeves, calling for funding to fully cover the additional costs they face.
At present, the estimated cost to organisations delivering public services in Scotland to cover the increase in employer National Insurance contributions could amount to £700 million.
The joint letter from First Minister John Swinney and COSLA President Shona Morrison has been supported by 48 organisations including the Scottish Trades Union Congress, Scottish Council for Voluntary Organisations and British Dental Association.
The First Minister said: “I would like to thank all the public and voluntary sector organisations who have come together to call in a unified voice for this decision to be reconsidered.
“We are disappointed that the UK Government did not engage with the Scottish Government on the change to employers National Insurance Contributions and we are concerned about the additional pressure it places on all employers. The Scottish Budget is expected to pass within weeks, and alongside local authorities, we need clarity.
“We will continue to press the UK Government to raise our deep concern about the implications of the increase to employer National Insurance contributions for organisations across Scotland, and the risk to the vital services they provide if these additional costs are not fully funded.”
SCVO chief executive Anna Fowlie added: “Coming on top of rising costs and fragile funding, this ill-thought-through rise in the cost of employing staff is a body blow to many Scottish charities.
“Employers, staff and people receiving vital public services will all be hit hard. It’s unusual to see this range of voices in collective agreement and I hope the Chancellor will reconsider her position.”
The letter has been supported by:
Roz Foyer, General Secretary, Scottish Trades Union Congress (STUC)
Anna Fowlie, Chief Executive, Scottish Council for Voluntary Organisations (SCVO)
Martin Green, Chair, Community Pharmacy Scotland
Eilidh Thomson, Chair, Optometry Scotland
David McColl, Chair of the Scottish Dental Practice Committee, British Dental Association
Jacki Smart, Chair, Scottish Hospices Leadership Group
Gavin Sinclair, Director of Funding and Partnerships, Venture Trust
Wilma Thomson, Manager, Rape Crisis Grampian
Sharon Aitchison, Chief Executive, Monklands Women’s Aid
Marsha Scott, Chief Executive, Scottish Women’s Aid
Lauren McGregor, Children and Young Person’s Team Leader and Independent Domestic Abuse Advocate, Committed to Ending Abuse (CEA Ltd)
Susie Stein, Chief Executive, Scottish Borders Rape Crisis Centre
Jan Swan, Chief Executive, Fife Rape and Sexual Assault Centre
Colin Lee, Chief Executive, Council of Ethnic Minority Voluntary Sector Organisations (CEMVO) Scotland
The 2025-26 Budget will deliver progress for the people of Scotland, with a record increase in frontline NHS spending, and plans to lift 15,000 children out of poverty by mitigating the UK Government’s two-child limit from 2026.
Setting out the Budget to Parliament, Finance Secretary Shona Robison said the government had listened and would now act on the priorities of people, businesses and organisations across the country – delivering progress for Scotland, by Scotland.
The 2025-26 Budget includes:
a record £2 billion increase in frontline NHS spending taking overall health and social care investment to £21 billion to reduce NHS waiting lists, making it easier for people to see their GP, and progress the Belford Hospital, Monklands Hospital and Edinburgh Eye Pavilion projects
funding for universal winter heating payments for older Scots, and investment to allow the mitigation of the two-child cap from 2026
tax choices that freeze income tax rates, increase the Basic and Intermediate rate thresholds to put more money in the pockets of low and middle-income earners, and provide business rates relief for hard-pressed local pubs and restaurants
a record £15 billion for local government to support the services communities rely on and £768 million to provide 8,000 more affordable homes
£4.9 billion of action on the climate and nature crises to lower emissions and energy bills, protect the environment, and create new jobs and opportunities
a real-terms uplift of 3% for spending on education and skills to maintain teacher levels and invest in school infrastructure, as well as new funding to put more breakfast clubs in primary schools
a £34 million uplift for culture in 2025-26
The Finance Secretary said: “I am proud to present a budget that delivers on the priorities of the people of Scotland.
“Parliament can show that we understand the pressures people are facing. We can choose to come together to bring hope to people, to renew our public services, and deliver a wealth of new opportunities in our economy.
“This Budget invests in public services, lifts children out of poverty, acts in the face of the climate emergency, and supports jobs and economic growth.
“It is a budget filled with hope for Scotland’s future and I look forward to working with all parties in Parliament to secure agreement around its provisions.”
£6.9 billion total investment in social security, including the Scottish Child Payment
almost £4.2 billion across the justice system in 2025-26, including £1.62 billion for policing to support capacity and capability, £881.1 million for prisons, including £347 million for the prison estate to deliver HMP Glasgow and HMP Highland, and £159 million for community justice services to support the wider use of community interventions
over £2.6 billion towards public transport to support bus, rail and ferry services and increases the dedicated funding available to the four councils operating their own ferry services to £50.3 million
over £660 million for rural communities to support the crucial contribution of Scotland’s farmers, crofters and the wider rural economy
almost £90 million to protect, maintain and increase our woodlands and peatlands, to restore more than 15,000 hectares of degraded peatland and ensure the creation of more than 11,000 hectares of woodland across Scotland
a £34 million uplift for culture in 2025-26, building on the £15.8 million increase in the last Budget to take the total incremental increase in culture funding to almost £50 million – the halfway point in our commitment to increase funding to culture and the arts by £100 million more annually by 2028-29
£6 million for the National Islands Plan to deliver infrastructure projects designed in partnership with islanders to support successful and resilient island communities
protection for free tuition and a 3.5% increase in total investment in Higher Education, compared to a 3.08% increase in university funding in England
Ben Macpherson MSP has welcomed the Scottish Government’s budget commitment to provide significant additional funding for the Granton Waterfront regeneration project, with a long-term agreement to be formalised in 2025.
Having spoken regularly about Granton in the Scottish Parliament this year, and previously, to promote the area as a strategic development site for Edinburgh and Scotland as a whole, Ben Macpherson MSP is delighted that the Scottish Government has committed financial support to significantly progress the City of Edinburgh Council’s ambitions plans.
The budget statement by Shona Robison MSP included: “I can confirm today that we will be working with Edinburgh City Council to unlock over 800 new, net zero homes at their Granton development site.”
In the Scottish Parliament, during the Budget statement and question session, Ben Macpherson MSP for Edinburgh Northern and Leith said: “As the local constituency MSP, I believe passionately in the significant potential for the development of Granton Waterfront to help tackle Edinburgh’s housing challenges, to transform the northern part of our capital city for the common good, and to deliver economic growth, new opportunities and multiple positive benefits for existing communities and our country more broadly – that’s why I have worked constructively to highlight all of this to Ministers, and am therefore delighted and grateful that the Finance Secretary has committed to working with City of Edinburgh Council to deliver 800 more homes.
“Can the Finance Secretary say more about the Scottish Government’s commitment to the development of Granton Waterfront – as a strategic site – and the positive impact this will deliver for the people of Northern Edinburgh and Scotland as a whole?”
The Cabinet Secretary for Finance, Shona Robison MSP, replied: “Ben Macpherson is absolutely right, the Granton Waterfront development is a big deal for Edinburgh, and we will work with Edinburgh Council over the coming months and hope to announce a deal on the detail early in the 2025-26 financial year to support this multi-year project.
“And I talked in my statement about it unlocking 800 new net-zero homes of mixed types and tenures but also sustainable transport links and placemaking initiatives.
“This can be a gamechanger for Edinburgh and I am very acutely aware of the housing need in Edinburgh, and I think this will go a long way to helping as part of this solution.”
Ben Macpherson MSP for Edinburgh Northern and Leith, added: ““This is a very significant step forward towards tackling Edinburgh’s housing emergency and realising all of North Edinburgh’s remarkable potential.
“I have passionately and consistently supported the regeneration of Granton Waterfront throughout my time as the MSP for Edinburgh Northern and Leith, and have worked to be a constructive link between the Scottish Government and the City of Edinburgh Council in this collective endeavour.
“The vacant and derelict land in Granton has the potential to be transformed into a new residential hub and a destination to visit for locals and tourists alike – just like in Dundee and other waterfront cities across the world. It is fantastic that the Scottish Government has committed to this vision and given pivotal financial backing to make it happen!
“Edinburgh continues to face significant, various housing challenges and building more affordable homes is crucial in helping to tackle this. With Scottish Government support, the development plans for Granton will deliver transformational change to benefit the local area and the wider economy.
“It has been a consistent priority since my election to promote and deliver more affordable housing in Northern Edinburgh – as well as accompanying infrastructure and facilities in the area, like cultural and creative hubs, opportunities for small businesses to thrive, and key services such as schools and health centres – and I look forward to seeing the development of Granton benefit the people of Edinburgh in the years ahead, and the additional investment and opportunities that will be created.”
BUDGET REACTION:
Responding to today’s Budget statement by the Finance Secretary, John Dickie, Director of Child Poverty Action Group (CPAG) in Scotland, said: “The Finance Secretary is absolutely right to mitigate the two-child limit in the absence of abolition at UK level.It’s a pernicious policy that pushes 15,000 children into poverty in Scotland alone.
“Investing in social security for families is key to delivering on the First Minister’s number one priority of eradicating child poverty.
“The devil will be in the detail and families really can’t wait until 2026 to see their incomes boosted, so an above inflation increase to the Scottish child payment is still needed in the meantime.
“But there is no question this is the right focus for prioritising spend. We need the UK government take the same approach to investing in family benefits as a matter of utmost urgency.”
CHILD POVERTY ACTION GROUP
COSLA
Responding to today’s Scottish Government draft budget, Poverty Alliance chief executive Peter Kelly said: “The two-child limit is a huge injustice that has no place in a compassionate society – because every child matters and every child should get support they need.
“We welcome the Scottish Government’s proposals today, and we hope that the UK Government works positively and quickly to get this extra support to households with children. We hope it adds to the pressure to scrap the two-child limit across the UK.
“With record numbers of children in temporary accommodation, additional investment in affordable homes and homelessness prevention is necessary and welcome. But we know that more social homes are needed to tackle the housing emergency in Scotland – meeting that challenge requires further investment.
“Many of our members have called for the Scottish Government to make up the difference for pensioners who have had Winter Fuel Payments taken away from them. They will welcome today’s plans.
“We have worked directly with people who are forced to live on a pittance by the unjust UK asylum system, and we supported their campaigns for free bus travel. It is welcome that the Scottish Government have allocated to funding to that proposal, which will increase their freedom to build a life beyond poverty and take part in society. We hope this is the start of a move to provide bus passes to more people – starting with those eligible for benefits.
“But we can do more. There are around 240,000 children in poverty in Scotland. We need to go further and faster if we are going eradicate child poverty.
“That means more immediate support through the Scottish Child Payment and using our powers over tax and investment to build a stronger society for all of us – especially people in poverty.”
POVERTY ALLIANCE
SAVE THE CHILDREN SCOTLAND
SCVO
SCOTTISH HOSPICES
“Today @scotgov announced £768m to buy or build 8k affordable homes next year. It is a sign it’s taking the housing emergency seriously but it is only a reverse of previous cuts. As a result, it’s a cut in real terms as same money buys less now compared to two years ago.
“Though it is a step forward, 8,000 homes is a drop in the ocean compared to what is needed There are 243,000 people on waiting lists in Scotland. The last decades have seen the decimation of council housing because of a lack of funding, stock transfer and right to buy.
“This government needs to deliver more social housing by allocating greater funding for stock buy back and for social and council house building programmes, to ensure more people have a stable, secure, affordable place to live.”
LIVING RENT
We welcome the budget statement from the Scottish Government signalling the value it places on culture & the arts.
Culture is the beating heart of Scotland & this budget offers us all hope for a more stable, positive future.
EDINBURGH INTERNATIONAL FESTIVAL
Creative Scotland wholeheartedly welcomes the positive news of the substantial uplift for Culture, including Creative Scotland, in the Scottish Government’s draft budget announced today.
In 2025/26, Creative Scotland’s draft Grant-in-Aid budget from the Scottish Government will be £80m, up from £51.4m in the previous year. Included in this is an additional £20m, specifically for use in supporting the Multi-Year Funding programme and an additional £2m to support delivery of Screen Scotland’s strategy.
The Board of Creative Scotland will meet on 16 December to agree the final budget for Multi-Year Funding and a further update will be made following that meeting.
The final outcomes from the programme will be announced by the end of January.
Creative Scotland’s Chair, Robert Wilson, said: “Today’s draft budget announcement by the Scottish Government is enormously welcome. The major boost to Multi-Year Funding and other activities opens up wider opportunities, and we are grateful to the Scottish Government for this significant vote of confidence in Creative Scotland and the creative and culture sector.
“This is especially positive in the light of the long-term financial challenges the sector has been dealing with and will enable people and organisations to once again look forward with more confidence.”
CREATIVE SCOTLAND
Today’s budget released by the Scottish government is a “step in the right direction” but comes too late to ease the winter crisis already hitting some of the country’s A&Es.
This is the response from The Royal College of Emergency Medicine (RCEM) following the budget announcement today – Wednesday 4 December 2024 – by Finance Secretary Shona Robison MSP.
Dr Fiona Hunter, RCEM’s Vice Chair for Scotland said: “We welcome the government’s commitment to addressing many of the systemic issues that have plagued our health care system – its patients and staff – for far too long.
“However, it has not come soon enough to ease pressures faced by A&Es who are working under extreme pressure to care for patients right now.
“We restate our commitment to working with the Scottish government to bring an end to this reality and #ResuscitateEmergencyCare in Scotland, for generations to come.”
The budget statement comes just one day after an Audit Scotland report revealed the number of people remaining in hospital because their discharge has been delayed – often due to a lack of social care capacity – is the highest on record.
ROYAL COLLEGE OF EMERGENCY MEDICINE
In response to today’s Scottish Government Budget,Debbie Horne, Scotland Policy and Public Affairs Manager at Independent Age said: “Older people across Scotland will be relieved to see the return of some help with winter energy bills through the Pension Age Winter Heating Payment from next year.
“For many not currently receiving Pension Credit, or those just above the eligibility, this money is desperately needed. Although not what they were originally due to receive, last week’s decision has been welcomed by older people in financial hardship across Scotland.
“It’s also good news that Scottish Social Security has been uprated with inflation, including entitlements that are important to older people, such as Pension Age Disability Payment and Winter Heating Payment. Many people in later life will be reassured that this has been confirmed.
“We are pleased to see that the Scottish Government is focussed on supporting renters. Over recent years both the number of older people renting privately and the proportion in poverty has risen. The increase in the Discretionary Housing Payment funding pot is an important lifeline to many older private renters, making up rent shortfalls, and the increased investment in social homes building should give tenants of all ages more security.
“However, it is concerning that the Scottish Welfare Fund, which can be a crucial safety net for older people when emergencies occur, such as needing help with food or heating costs, has not been increased.
“Generally, the older people in financial hardship that we speak to will feel heard by the Scottish Government today. However, we remain concerned about older people this winter. Going forward, the Scottish Government must continue to make decisions that improve the lives of older people in poverty.”
INDEPENDENT AGE
Jonathan Carr-West, Chief Executive, LGIU Scotland,said: “We know from our annual survey that local government finances in Scotland are hanging by a thread. One in four councils are afraid they won’t be able to pass a balanced budget next year. Three quarters are warning that they may not be able to do so within the next five years. Today’s Budget from the Scottish Government does not engage with the scale of that challenge.
“Local government may welcome commitments to the New Deal with Local Government continuing work on a fiscal framework and plans to deliver new revenue raising powers. However, they will be dismayed to see how much funding continues to be ring fenced.
“There is an increase in core funding in today’s Budget but it doesn’t cover the ever growing costs of core statutory services.
“The Scottish Government has responded to the concerns of councils and has removed the freeze on council tax rises, but the Cabinet Secretary’s expectation that record funding levels should mean councils do not need to put up council tax is too complacent.
“The truth is that even with the additional funding announced today, local authorities will still need to raise council tax and make cuts to services and will still edge closer to being unable to balance their books.”
LOCAL GOVERNMENT INFORMATION UNIT
Commenting on the Finance Secretary’s Budget statement this afternoon, Director of CAMRA Scotland Stuart McMahon said:“Pub goers and licensees will be raising a glass to the news that the Scottish Government are finally introducing help with the burden of business rates that have contributed to scores of pubs having to close their doors in recent years, and at a higher rate than elsewhere on these islands.
“Pubs are a vital part of our social fabric and it is right that they will now get the same 40% reduction in business rates that pubs in England get. It is also encouraging that pubs on island communities will continue to get a 100% reduction with their business rates.
“In order to make sure our pubs survive and thrive at the heart of our communities ministers must now commit to reforming the entire Business Rates system to make it fairer. The Scottish Government should level the playing field between online and bricks-and-mortar businesses and finally end the shocking overpayment that pubs have to cough up under the current system.”
CAMRA
Mary Glasgow, chief executive at Children First said: “The Cabinet Secretary says this budget will lift children out of poverty but given that Scotland faces a childhood emergency it is difficult to see how.
“The promise of jam tomorrow, in the form of mitigating the UK two-child cap does nothing to alleviate the plight of thousands of children and families across Scotland who are going hungry today.
“We called on the Scottish Government to invest in early help and support for families and to increase the Scottish child payment. It is disappointing that they have chosen to delay investing in children rather than taking immediate action. Children can’t wait.”
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.”
EDINBURGH INTEGRATION JOINT BOARD PLANS TO END £4.5 million GRANTS TO 63 COMUNITY PROJECTS
SCOTTISH COUNCIL of VOLUNTARY ORGANIATIONS (SCVO)
SCVO response to proposal by Edinburgh Integrated Joint Board to remove grant-funding from voluntary organisations:
Letter to Councillor Cammy Day, Leader of City of Edinburgh Council,
Professor John Connaghan OBE, Chair of NHS Lothian
cc Pat Togher, Chief Officer EIJB
Proposal by Edinburgh Integrated Joint Board to remove grant-funding from voluntary organisations
I am writing to add SCVO’s voice to the protests regarding the IJB’s proposal to withdraw funding in-year from charities and community groups. 37 of our members are impacted by this decision.
The intention outlined in the board paper to take a more strategic and collaborative approach in the future has been totally undermined by the impact of reneging on this year’s grant funding.
Trust is a fragile thing, and it will take a long time to rebuild any sense that the council and the health board have an understanding of, or respect for, the voluntary organisations that do so much to support our communities.
When you look to build your strategic partnership in 2025, many of them simply won’t be there because they will have gone out of business.
Far from saving money, this will generate significant costs to public services as people fall through the cracks, and the additional millions of pounds voluntary organisations bring in from trusts and foundations or the private sector through match funding and other fundraising activities will disappear. A truly strategic approach would be looking to maximise that income-generation, not cut it off.
It appears that over 100 people who were already in a precarious enough position will lose their jobs. And the discretionary effort of hundreds more volunteers will be lost.
It is evident that when money is tight, which I recognise it is, the council and the health board have retrenched and focused on short-term savings rather than the public good.
The table in the board paper which illustrates where the money could be “better spent” says it all – to the IJB, acute services matter more than prevention or early intervention. As well as being short-sighted ethically and financially, it flies in the face of all the evidence around what communities need and the rhetoric around person-centred services and prevention.
I would urge you to intervene and stop the IJB making a decision everyone involved will regret.
Yours sincerely,
Anna Fowlie Chief Executive, SCVO
BIG HEARTS: “The value the charity sector brings to our local communities should never be in doubt.”
VOLUNTARY HEALTH SCOTLAND:
VHS Chief Executive @MistryTej has commented on the recent cuts being proposed by Edinburgh IJB.
What will it take for recognition of the crucial work the third sector are doing to reduce health inequalities?
Along with the rest of the sector we are extremely concerned by the proposed early cessation of EIJB grant funding to 64 voluntary sector organisations. As well as the loss of important services and the associated job losses, this will impact volunteering.
Volunteers are at the heart of the affected organisations, contributing 206,000 hours of support to people in the community worth over £2m. These volunteering opportunities are not only a lifeline to people they help support.
They also enable local people to be active in their communities, build confidence, develop skills, reduce isolation – all of which contribute to better health outcomes for volunteers themselves.
The impact of the loss of these volunteering opportunities cannot be understated.
LIVING RENT:
64 charities are at the risk of closure due to £4.5 million worth of proposed cuts. This will have devastating effects for tenants, for workers and for communities across Edinburgh.
Let’s defend our community centres, services & jobs.
Join us to say NO to Labour-led cuts!
SCOTT ARTHUR MP:
I have today (Wednesday) written to the Cheif (sic) Officer of the EIJB opposing the proposed cuts to the third sector in my constituency – I expressed my concerns in the strongest possible terms.
I support @cllrcammyday fully in his call for fair funding for Edinburgh.
Edinburgh Integration Joint Board meets TOMORROW (Friday 1 December) in the Dean of Guilds Room at The City Chambers at 10am.
The following organisations will make their case against the cuts at the meeting:
‘We’re not a nice-to-have sector. We’re an essential sector‘
It all feels a bit grim (writes SCVO Chief Exec ANNA FOWLIE).
A few weeks ago, the Chancellor revealed a “black hole” in public finances across the UK and announced the end to the universal winter fuel allowance. This week the Cabinet Secretary for Finance announced significant cuts to programmes this year to enable the Scottish Government to fund public sector pay deals.
On Wednesday, John Swinney took to the lectern in the Scottish Parliament to present his first Programme for Government, having watched them being delivered from different seats across the Scottish Parliament in the previous 24 years.
I’m sure that was a novel experience for him, but I’m left with a sense of déjà vu.
There is no doubt that parts of our public sector need reform. It’s been more than 13 years since the Christie Commission said that reform must empower individuals, integrate service provision, prioritise expenditure on prevention and increase shared services. But have we seen significant shifts, or have the deckchairs just been rearranged and repainted while pointing towards little ‘pilots’ as evidence of progress?
The voluntary sector is often closest to the most vulnerable people in our society and best placed to support them, including helping them to navigate the baffling complexity of some public services.
Hundreds of organisations are rooted in communities, supporting families to help address the First Minister’s top priority of tackling child poverty. Indeed, the sector will be key to achieving all four of the First Minister’s priorities.
However, with resources increasingly being pulled into the public sector, much of the voluntary sector is resigned to getting scraps from the table.
With years of static funding, an inability to keep pace with public sector pay and constant inability to plan because of a lack of Fair Funding, it does feel like we’ve reached a crisis point.
There is no doubt Government sometimes needs to make difficult choices, but they’re avoiding the hard ones. If we are to turn the rhetoric on addressing poverty and public service reform into reality, we can’t expect current systems and structures to deliver the radical change we need, and we can’t imagine that the public sector can do it all alone.
Public sector staff deserve to be paid fairly, but the voluntary sector deserves to be treated fairly. We deserve more than warm words.
We need to channel the limited resources we have to the experts. People are the experts in their own lives – and most know what they need.
Those at the front-line know how best to support them, but we need to challenge the practice that the public sector is prioritised without truly thinking about how ‘public services’ are best delivered, and by whom.
We’re not a nice-to-have sector. We’re an essential sector.
Tomorrow’s Programme for Government from the Scottish Government must include urgent action to deliver multi-year funding and progress Fair Funding to support voluntary organisations, their staff and their volunteers, and the people and communities our sector works with, says SCVO.
SCVO and colleagues across the voluntary sector welcomed the Scottish Government’s commitment to deliver Fairer Funding for the sector by 2026, including exploring options to implement multi-year funding deals.
Despite this renewed focus, 18 months on from the policy prospectus, there has been little progress.
In the Programme for Government (PfG) action is urgently needed to deliver multi-year funding and progress Fair Funding to support of voluntary organisations, their staff and their volunteers, and the people and communities our sector works with.
Background
For over 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, including within several Scottish Budgets and Programmes for Government, and the Economic Strategy.
In April 2023, the Scottish Government’s policy prospectus, New leadership – A fresh start, renewed these ambitions, committing to delivering Fairer Funding for the sector by 2026, including exploring options to implement multi-year funding deals. This was followed in May 2023 by a commitment in the Medium-Term Financial Strategy to adopt multi-year spending plans.
Despite this renewed focus, 18 months on from the policy prospectus, there has been little progress. The most recent Scottish Budget made no further commitments, deferring action on any multi-year funding to the upcoming Medium-Term Financial Strategy, and making no reference to voluntary sector funding.
The problem
It is widely understood that our sector is facing 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.
The running costs and cost-of-living crises continue to put pressure on voluntary organisations – with demand for services increasing, costs rising, and financial uncertainty ongoing.
From August 2021 to April 2024, the proportion of voluntary sector organisations reporting financial challenges has increased from 47% to 77%.
Over a third (36%) of organisations have reported having made use of their financial reserves in the 3 months leading into April 2024, a 4% increase compared to the same period in 2023. Depleting reserves for recurring costs is not sustainable, with 60% of the organisations sharing that continuing to use reserves was unsustainable for their organisation.
As costs have risen for voluntary organisations over the past three years, so have demands on the services that they provide for the most vulnerable people in society. In August 2021, 56% of organisations reported an increased demand for core services and activities, rising to 63% by April 2023.
The most recent Third Sector Tracker results were published earlier this month and cover the three months to April 2024.
By April 2024, the Third Sector Tracker found:
62% of organisations believed that rising costs had affected the ability to deliver core services or activities since December 2023.
47% of organisations reported cost increases in their top three challenges.
33% of respondents had not been able to deliver all their planned services in the preceding 3 months.
Only one third (32%) of respondents have been able to meet all of the increased demand for their services in the preceding 3 months. For the organisations who had been unable to meet increased demand, the main difficulties included: staff capacity (54%); raising funds to meet the demand (50%); and volunteer capacity (41%.).
As local councils fund far more voluntary organisations than Scottish government, the fallout from the local government settlement will also have a significant impact on voluntary organisations, further exacerbating these pressures. Similarly, any reduction in local services will result in further increased demand for some voluntary organisations.
The Emergency Budget Response has also left organisations awaiting confirmation of Scottish Government funding vulnerable.
The solution
SCVO and colleagues across the sector welcomed the Scottish Government’s commitment to delivering Fairer Funding for the sector by 2026, including exploring options to implement multi-year funding deals. Without action in the Programme for Government (PfG), achieving this target becomes increasingly unlikely.
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
Accommodate at least the Real Living Wage and uplifts on par with those offered to public sector staff.
Full costs recovery, which includes core operating costs.
Long term funding should also be provided to local authorities, to allow them to enter into multi-year agreements with voluntary organisations. Between one quarter and one third of voluntary organisations receive funding from local authorities.
Without these commitments, achieving “Fairer Funding” by 2026 becomes increasingly unlikely.
To make and monitor progress, it is also essential that the PfG takes action on transparent funding, including developing timelines, goals, and actions to both monitor progress, and ensure progress can be scrutinised by the voluntary sector and Parliament.
Testimonials
“Like all voluntary organisations, we have very short-term funding, so while our contracts are on paper secure, everyone knows their job is only as secure as the current piece of short-term funding” – Registered charity
“Everything we do is dependent on funding, and amounts are often not confirmed until very late in the financial year” – Registered charity
“Due to annual funding from Scottish Government, which doesn’t cover our core costs, recruitment is often on short-term contracts or is subject to ongoing funding, of which there is no guarantee” – Voluntary sector intermediary
Conclusion
Scotland’s voluntary sector is an employer, a partner, and a vital social and economic actor central to delivering on the Scottish Government’s three missions of equality, opportunity, and community.
The Programme for Government is an opportunity for the First Minister and the cabinet team to recognise and support the many contributions of voluntary organisations, their staff and their volunteers across Scotland by making progress towards the Fair Funding our sector desperately needs.
To achieve this the Scottish Government must commit to progressing multi-year funding, develop timelines and goals, and make plans to monitor progress. To support a sustainable sector, multi-year funding must also recognise and incorporate essential Fair Funding elements.
Additional information
SCVO’s full proposals for the 2024/2025 Programme for Government cover two areas and can be found here:
A trailblazing partnership between the national membership body for Scotland’s voluntary organisations and the Scottish Government has launched a milestone charter to improve digital inclusion.
Scotland’s Digital Inclusion Charter is a collaborative initiative between the Scottish Council for Voluntary Organisations (SCVO) and the Scottish Government, aiming to ensure that, if they choose to, every individual and community across Scotland can benefit from the digital world.
The Charter, hosted and managed by SCVO, states that digital inclusion is “everyone’s responsibility”, and demonstrates how people can get involved in supporting further digital equity in Scotland.
The initiative commits organisations to tackling digital exclusion in any way that they can. By providing a framework for action, organisations can use the Charter to structure and resource digital inclusion work regardless of who they work with.
Currently, around 700,0001 people don’t have access to the Internet in Scotland. This significantly impacts their ability to access health services, banking, online shopping, better deals and savings and communicating with loved ones.
Sally Dyson, Head of Digital and Development at SCVO, underscored the vital role of the voluntary sector in achieving digital inclusion. She said: “SCVO has been leading the charge for digital inclusion in Scotland for more than ten years now.
“We work collaboratively across our sector and beyond to make sure that we drive home the message that everyone is responsible for digital inclusion
“We know that the digital divide seems to be widening over time, and we think that every organisation in Scotland can get involved in supporting the people they work with.
“SCVO is proud to have developed and established Scotland’s Digital Inclusion Charter in partnership with Scottish Government, and we’re looking forward to supporting organisations of all sizes to sign up and show their support.”
Ivan McKee, MSP and Minister for Public Finance, represented the Scottish Government and highlighted the importance of this initiative for Scotland’s future. He said: “I pleased to see the relaunch of the Digital Participation Charter as Scotland’s Digital Inclusion Charter.
“The Charter has been a collaborative effort between Scottish Government and SCVO and includes five new pledges to support organisations take ownership of digital inclusion.
“Digital inclusivity is fundamental to the Scottish Government in achieving our key priorities, and through working with SCVO we are able to support organisations to make substantial impact on the lives of people vulnerable to digital exclusion.”
The launch event, held at Standard Life House and hosted by Standard Life, brought together key stakeholders in a united effort to bridge the digital divide.
Andy Young, representing Standard Life, part of Phoenix Group, said: “We are a digital-first organisation, but we recognise that digital can be a barrier for some people, so we’ve made it a priority to help those who need extra support through delivery of our digital inclusion strategy.
“We welcome and support the work that SCVO is doing in this space, and are pleased to commit to the principles outlined in the Digital Inclusion Charter, which will provide a vital framework for organisations across all sectors to help those who want to become more comfortable using technology in their everyday lives.”
Find out more about Scotland’s Digital Inclusion Charter at digitalinclusion.scot.
