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 recent announcement by the Integrated Joint Board (IJB) regarding the disinvestment from up to 64 community organisations as part of its recovery plan for 2025/26 has ignited significant outrage among Third Sector, including members of the Edinburgh Community Health Forum (ECHF).
This drastic cut threatens the very fabric of our community support systems and undermines our collective commitment to health and wellbeing in Edinburgh, said ECHF’s Strategic Development Manager, Stephanie-Anne Harris.
Stephanie-Anne vehemently criticised the decision, stating: “This disinvestment will lead to the closure of numerous charities and an increased reliance on statutory services, including the NHS and Council.
“Furthermore, it contradicts the Scottish Government’s and Public Health Scotland’s advocacy for prevention and early intervention strategies.
“Evidence overwhelmingly supports that investing in prevention is one of the most cost-effective methods to improve health outcomes and reduce inequalities.
“This short-term approach to achieving savings is fundamentally misguided.”
Historically, core funding for the Third Sector was managed by the Council before being transferred to the IJB.
The current proposed cuts pose a severe threat to organisations that provide essential services to some of Edinburgh’s most vulnerable residents.
Catriona Windle, Chair of ECHF and CEO of Health All Round, a charity dedicated to supporting residents in Gorgie Dalry, Saughton, Stenhouse, and surrounding areas, added: “We call for an immediate halt to cuts scheduled for 2025 and urge the IJB to engage in meaningful discussions with the sector about sustainable funding solutions.
“While we recognise the need for budgetary considerations, we cannot afford to compromise on the vital support that Third Sector organisations provide. We propose delaying cuts until September 2025 to allow for a proper conversation about the future.
“The IJB must recognise that resourcing for the Third Sector is not non-essential; it is crucial for the wellbeing of our communities.
“We implore Council leaders and the IJB to consider resuming full responsibility for funding these vital services or to engage the Third Sector in developing a strategic funding model that ensures ongoing investment in our collective health.”
EDINBURGH Integration Joint Board meets on Friday 1 November at 10am in the Dean of Guilds Room at the City Chambers.
See belowfor meeting papers – including details of the cuts being recommended:
Community projects across the city are facing financial armageddon following news that Edinburgh Integration Joint Board (EIJB) plans to discontinue funding to 64 community projects across the city.
The EIJB is facing a financial crisis and sees slashing funds to third sector organisations as a way to tackling a massive deficit. If the recommendations are approved by board members at a meeting on Friday, the disinvestment in much-needed community services would save EIJB £4.5 million.
Although rumours of swingeing cuts were circulating for some days, the key papers announcing the plans only appeared online late on Friday afternoon – and they make grim reading for community organisations across the city.
The full papers for Friday’s meeting can be found below – and the Chief Officer’s recommendations make truly awful reading for 64 community organisations and the thousands of citizens they support.
Rubbing salt into the wounds, the EIJB also proposes cutting funding before the end of THIS financial year – two months early – forcing voluntary sector organisations to issue redundancy notices immediately. A fine early Christmas present!
For some projects, cuts on this scale would see a devastating reduction to the services they are able to provide to people living in some of Edinburgh’s most deprived communities. Scores of jobs will be lost if the cuts go ahead, vital services will be slashed and a number of community organisations may even be forced to close completely.
Restalrig’s Ripple Project announced: ‘The Ripple is devastated by the release of proposals to remove a huge proportion of health and social care funding from The Ripple in just 90 days time.
‘Please come to the Ripple next week and join us in our campaign to stop this happening.’ The Ripple provides and hosts a range of services from their busy community hub and they have set up a petition to oppose the cuts.
People Know How have already made the difficult decision to close their doors – and more will undoubtedly follow if the proposed cuts go ahead.
People Know How told service users: “Due to the drastic changes across the fundraising landscape in Scotland, it is with great sadness that we must announce that we are beginning to work towards closing People Know How including the redundancy of all our staff team.”
An online post explains: ‘People Know How was founded in 2013 and has grown to deliver services to thousands of people across Scotland over the past decade. Supporting people to be digitally and socially included through Reconnect, providing help to children as they move from primary to secondary school through Positive Transitions, and enhancing communities with projects including All Aboard, People Know How has always put people at the heart of what we do. ‘
‘A dedicated team of 24 paid staff and around 100 annual volunteers, interns, and placement students (VIPs) make all this work possible, and we collaborate with numerous funders and partners to maximise the reach and impact of the charity. In the last 4 years, People Know How has also expanded its reach to effect social change nationally as well as locally, through research, campaigning, influencing policy and our national Digital Support Helpline.
‘Due to the drastic changes across the funding landscape in Scotland, at the end of September, our Board and Chief Executive were faced with a difficult conversation in light of the lack of funding for the current and forthcoming financial years.
‘In just the last few months, we have seen devastating funding cuts across the sector and a drastic shift in the funding landscape. As a result, we have seen fewer options for long-term funding, with other funders closing entirely and leaving those that remain severely over-subscribed.
‘The Scottish Government is currently examining their approach to funding in the third sector, responding to calls from the sector for longer-term funding, unrestricted core funding, funding to accommodate paying staff a Real Living Wage and more. But as the debate continues, charities like People Know How are dealing with the reality.
‘The decline of available funds is directly at odds with the increasing need of the communities we support. Over the last few months, we have seen attendance to our digital groups and calls on our Digital Support Helpline increase.
‘We also recently partnered with BT to provide information about the digital landline switchover, with many groups across the country eagerly coming forward to work with us on this project. And just 2 months ago, we began our Positive Transitions support in schools for the new academic year, addressing a very real need for support felt by the children, young people and families moving to secondary school.
‘While we have funding for some projects, we will not hear back from our biggest funders until the end of this financial year and cannot move forward without the certainty that we will be able to support our service users and employ our staff beyond Christmas.
‘Since September, People Know How has been undergoing a 30-day collective consultation process to assess its future and options to avoid redundancies, including pausing all new activities to prioritise the support of those using our services.
‘We have also been speaking with our partners and contacts to assess options and opportunities where possible. That consultation process has now come to an end and unfortunately, we have not found a solution to save the 24 jobs and charity and have had to make the extremely difficult decision to work toward closing People Know How.
‘From today, (25 October), we will be working to wind down our projects and identify opportunities for those who use our services to continue being supported by other organisations. Our staff will also be looking for new employment opportunities. We will remain open until December but our capacity will be reducing gradually until then, as our team moves on.
‘Consideration is being made on how we close in the best way possible to value all the work and achievements since 2013. We are proud of what we have achieved over the last 11 years, supporting communities to improve wellbeing across Scotland.
‘The passion we have seen in every single one of our staff members and VIPs during this time has been incredible and we couldn’t be prouder to have been part of their lives and careers. Thank you to all who have been with us on this amazing journey.’
North Edinburgh’s R2 group is a coalition of local projects who united during the Covid pandemic lockdown to support vulnerable local people with food and essential supplies.
Spartans Community Foundation CEO Debbi McCulloch, who chairs R2’s development group, wrote to politicians and members of the EIJB yesterday:
Proposed IJB cuts to third sector organisations
As Chair of R2 Development Group I am writing to express our concern and dismay at the current rumours circulating within the 3rd sector about the IJB cuts to third sector grants, and potential disinvestment from 64 community organisations.
This disinvestment appears to be part of the IJB’s in year recovery plan and savings strategy for 2025/26. We find this particularly surprising given the consultation that the IJB have recently completed on their new strategy which prioritised prevention and closer collaboration with the 3rd sector.
We would also like to acknowledge that the third sector has already taken significant cuts this year from the grant funding and has still achieved (or in many case over achieved) on the targets set, yet the sector is facing the biggest cuts.
In north Edinburgh, it is estimated that this will result in around £1million worth of funding being lost to the area. We are particularly concerned that local income maximisation services could be lost as many of us work in partnership with these services and see the difference they can make in household income for the people we work with. This work is key to our collective contributions to reducing poverty in the City.
While we recognise the significant funding challenges faced by the IJB, disinvesting from the 3rd sector for short term cost savings seems misguided. Such actions are likely to increase pressure on both NHS and Council services, contradicting the Scottish Government, Public Health Scotland, and the Audit Commission’s strong advocacy for enhanced prevention and early intervention strategies which are known to take time and require investment.
Evidence consistently shows that investment in prevention is one of the most cost-effective methods to improve health outcomes and reduce inequalities, ultimately fostering greater sustainability with economic, social, and environmental benefits.
We hope for a constructive discussion with the IJB and other partners on how we can best support our communities together. We would be very grateful if you could investigate on our behalf and advise us accordingly.
We ask that:
• The funding for this year is guaranteed and runs the full length of the contract. • That the 25/ 26 grants are not cut in entirety and that we can be part of a conversation regarding how we maybe able to assist in making savings.
• That there is recognition that is these “savings” are to go through, we are shoring up future impacts.
We’d ask you to explore this matter further and share anything you find out with us. In particular we would like to know:
• What consideration has been made for the Audit Scotland, Chief Medical Officer and Scottish Government guidance to invest in health prevention, health activities in community? • If an equality impact assessment on these proposals has been carried out and what the conclusion of this was?
Finally, we’d ask you to talk your party colleagues, particularly if they sit on the IJB and ask them to do all they can to prevent these cuts.
We know, that when local community sector organisations get cut, it can take years to rebuild projects and relationships with local communities. As the social and health issues in our communities are continuing to increase, we want to continue to do all we can to alleviate the current crisis and build towards a more positive future. Please help us do this.
Edinburgh Community Health Forum (ECHF) has called for an immediate halt to the funding cuts announced by IJB.
ECHF’s Strategic Development Manager, Stephanie-Anne Harris, said: “This drastic cut threatens the very fabric of our community support systems and undermines our collective commitment to health and wellbeing in Edinburgh.
“This disinvestment will lead to the closure of numerous charities and an increased reliance on statutory services, including the NHS and Council.
“Furthermore, it contradicts the Scottish Government’s and Public Health Scotland’s advocacy for prevention and early intervention strategies.
“Evidence overwhelmingly supports that investing in prevention is one of the most cost-effective methods to improve health outcomes and reduce inequalities.
“This short-term approach to achieving savings is fundamentally misguided.”
Historically, core funding for the Third Sector was managed by the Council before being transferred to the IJB.
The current proposed cuts pose a severe threat to organisations that provide essential services to some of Edinburgh’s most vulnerable residents.
Catriona Windle, Chair of ECHF and CEO of Health All Round, a charity dedicated to supporting residents in Gorgie Dalry, Saughton, Stenhouse, and surrounding areas, added: “We call for an immediate halt to cuts scheduled for 2025 and urge the IJB to engage in meaningful discussions with the sector about sustainable funding solutions.
“While we recognise the need for budgetary considerations, we cannot afford to compromise on the vital support that Third Sector organisations provide. We propose delaying cuts until September 2025 to allow for a proper conversation about the future.
“The IJB must recognise that resourcing for the Third Sector is not non-essential; it is crucial for the wellbeing of our communities.
“We implore Council leaders and the IJB to consider resuming full responsibility for funding these vital services or to engage the Third Sector in developing a strategic funding model that ensures ongoing investment in our collective health.”
EVOC, the voice of Edinburgh’s voluntary sector, said: “We are devastated to see the depth of the cuts proposed to the Third Sector in the EIJB Meeting Papers: https://bit.ly/4eZsPXL
“Our sector has an essential role to play in delivering key health and social care services for some of the most vulnerable people in Edinburgh and contributes to the four priorities of the @EdinburghHSCP ‘More Good Days Strategy’.
“Our Board and staff are meeting key colleagues and partners to move quickly on a strategic response and will share more details in the coming days.”
The first option would close the existing programme early, giving grant recipients only three months’ notice and saving £700,000 in this financial year. This would be extremely disruptive for both organisations and people accessing their programmes. Third sector organisations are reasonably entitled to expect to receive funding for the entire grant period. We are especially concerned that this could lead to sudden job losses and financial hardship for affected third sector workers.
The second option would be to end the grants programme entirely in future years, and develop an alternative approach, saving £4.5mn in direct costs next year and beyond. Whilst this would mean existing grants would continue for the remainder of this financial year, it would result in significant uncertainty for the future of some organisations and programmes and for the people who ultimately benefit from these supports and services.
Nevertheless, it is claimed that only one of the funded services represents “value for money”. Our understanding is that this assessment has been made via an additional, retrospective EIJB evaluation, and it is unclear if organisations were given adequate time and direction to monitor and evidence the value of their programmes.
In many cases the impact assessment refers to the availability of statutory services as an alternative, for example in relation to maternal mental health. However, the extreme pressures on statutory services, especially mental health services, are well documented.
Third sector services are in many cases supporting people who have fallen through the gaps in or been unable to access statutory services. The withdrawal of grant funding for third sector services will therefore leave those people with no support at all.
Responding to the proposals, the ALLIANCE Chief Officer of Development, Sara Redmond, said:“Third sector organisations provide a range of invaluable services that help to reduce health inequalities and support a preventative approach to health and wellbeing. We are therefore extremely concerned by the proposals from Edinburgh IJB that could see their entire health inequalities grant programme close.
“The EIJB’s own impact assessment acknowledges that these proposals will negatively impact the health and wellbeing of people in Edinburgh, especially in areas already experiencing higher levels of health and socio-economic inequality. In addition to the risk of job losses, these proposals also risk seriously damaging the relationship between the third sector and statutory sector funders, especially as there has been no public consultation in advance.
“Third sector organisations must be able to trust when bidding for contracts or grants that funding will be provided for the entire contracted period. They must also be consulted as equal partners to find a way forward when circumstances change, and for the responsibility to be shared for evaluating the impact of what are complex social policy agendas.
“We urge the EIJB to reject these proposals and develop a fairer way forward that will ensure people receive the support they need and that the third sector can continue its invaluable work to mitigate and prevent health inequalities.”
Work has urgently been going on behind the scenes since the EIJB papers were released and a number of meetings have taken place with more to follow in the run-up to Friday’s crucial board meeting.
Deputations are being arranged, community support is being harnessed across the city and politicians are being lobbied – and opposition to the draconian proposals has gained political support.
SNP Councillor Vicky Nicholson is a member of the EIJB board and she announced last night that the SNP will oppose the report recommendations:
Labour’s Cammy Day said in a statement on Twitter yesterday: ‘After over a decade of @theSNP cuts& under funding Edinburghs health &social care, proposals to cut the third/voluntary sector are here.
“Edinburgh Labour will propose a way forward to engage the sector, work with them & city partners and stop the in year cuts wherever we can.’
Edinburgh Integration Joint Board meets on Friday 1st November at 10am in the Dean of Guilds Room at the City Chambers.
You can read the full details of the recommendations here:
Following reports of the UK Gov’s #Budget24 plans for increases to employer National Insurance contributions, SCVO wrote a joint letter with @NCVO@NICVA & @WCVAcymru to @RachelReevesMP about the potential impact this could have on the voluntary sector:
SCVO, NCVO, NICVA, and WcVA letter to Rachel Reeves, Chancellor of the Exchequer: Autumn Budget 2024 – employers’ National Insurance contributions
Dear Chancellor
Autumn Budget 2024 – employers’ National Insurance contributions
We are writing to you on behalf of charities and community organisations across the UK, in relation to recent reports of plans to increases to employer National Insurance contributions and the potential impact this could have on the voluntary sector.
If reports in the media are correct, National Insurance contributions are to be increased in the private sector. Public sector employers will be reimbursed for any such increase, to protect public services. But there has been no mention of the voluntary sector. This comes as a disappointment, given that our sector provides essential public services to people and communities up and down the country, delivering significant savings to the public purse.
With costs climbing, funding falling, and demand for services increasing, our sector already faces a crisis. The additional costs placed on the sector by increasing employers’ National Insurance contributions will only compound this.
As you navigate the significant financial challenges the country faces, we are confident that it would not be your intention to place them at the door of charities and community organisations. We are not asking for special treatment, just parity with the public sector.
In the spirit of partnership – as outlined in the UK Government’s Covenant document which published last week – we are assuming this is an oversight or over-simplification by the media and we are therefore calling on you to urgently clarify this matter, confirming that no additional financial burden will be placed on our sector.
We look forward to receiving a response as a matter of urgency.
Long-standing enterprise and financial education programmes for schools and colleges to cease immediately as Young Enterprise Scotland denied Scottish Government support
Young Enterprise Scotland, a national charity that has delivered enterprise education to schools and colleges for over 30 years, is now at risk of closing after the Scottish Government scrapped established grants and failed to follow through on funding assurances.
The national charity is facing closure due to the Scottish Government’s failure to honour funding assurances and last-minute changes to funding methods.
YE Scotland, which develops entrepreneurial mindsets in young people and educators has been a crucial strategic delivery partner in supporting national ambitions in education and entrepreneurship. The organisation has lost its full Scottish Government grant, which accounts for the majority of its overall income.
If no emergency funding can be sourced, the organisation will be forced to close. Thousands of hours of practical learning to primary and secondary students in the circular economy, teamwork, communication, financial planning, sales and marketing and more will be immediately wiped off the school week.
Students will no longer be able to complete the SCQF Level 6 qualification ‘higher’ in entrepreneurship and up to 31 jobs will be lost.
Last year, YE Scotland supported over 18,000 school and college students through its enterprise programmes, including its flagship Company Programme, which many entrepreneurs credit with setting them on a successful business career. In the past three years, more than 1,000 students have gained a YE Scotland enterprise qualification (SCQF Level 6) to prepare them for further education, work and life.
Young Enterprise Scotland Chief Executive Emma Soanessaid: “We are absolutely devastated that the future of Young Enterprise Scotland now seems untenable with the loss of our major income source.
“Not only will this have a huge detrimental impact on our dedicated staff team, who now face redundancy, but given our extensive reach across Scotland it will also impact massively on the national education landscape and the education of young people in Scotland of which our work played such a crucial role.
“Failing to support this crucial stage of the entrepreneurial pipeline is entirely at odds with strategic priorities reflected in the Government’s National Strategy for Economic Transformation and the key recommendations of the Entrepreneurial Campus report.”
YE Scotland’s funding has historically come from a combination of a core continuity grant from the Scottish Government, an ongoing pipeline of support from Trusts and Foundations and, to a lesser extent, support from the private sector.
For both the financial years 2022/2023 and 2023/2024, the Scottish Government grant was significantly delayed. This was particularly so in the last financial year with the delay resulting in late submission of the charity’s audited accounts, directly impacting its ability to apply for additional funding.
Over both years, the charity has supported the Scottish Government during their funding delays by continuing to deliver vital services in good faith.
As a provider of education-based programmes that relies on onboarding schools ready for delivery at the start of the academic year, YE Scotland continued to work on delivering its programmes for 2024/25.
Given the charity’s long standing relationship with the Scottish Government, the experience of previous grant cycles and communications from government officials right up until May 2024 about the availability of funding, the charity onboarded around 80% of the schools and colleges it would be working with for the coming year.
However, in July this year, YE Scotland was advised the grant process would now cease with immediate effect, replaced with a competitive process. The Entrepreneurial Education Fund subsequently opened in August, with no consideration being given to work already underway or any costs incurred up to that point.
YE Scotland Chair, Dr Andy Campbell, who is founder of the Scottish Space Network, added: “For over 30 years, Young Enterprise has delivered life-changing opportunities for young people in Scotland, myself included.
“We understand that government budgets can face challenges and delays, particularly in the current climate. As a committed partner, the charity has historically supported the Government’s delays in funding, continuing delivery to ensure our young people’s futures are not impacted.
“Historically, these delays were always addressed, with costs settled and accompanied by thanks and apologies. However, despite this constructive commitment, it now appears that future funding is to be withdrawn — which we can manage, albeit as a vastly smaller organisation and not delivering the vast majority of our current activity.
“However, critically it now seems that our historical outlays will remain unsettled putting the entire organisation at risk of closure. Without emergency funding, the charity will be in a precarious situation, one that could have been avoided. We are ready to engage with Ministers and officers, hopeful that our past support will be reciprocated.”
The charity is seeking immediate emergency financial support to ensure the organisation can survive, albeit in a reduced capacity, maintaining YE Scotland’s crucial role in delivering enterprise education and supporting Scotland’s future entrepreneurial leaders.
‘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 call to value our workforce & embrace Third Sector solutions with immediate increased funding
With over 40 years of experience in various roles within the health and care systems, from a clinician in the acute sector to working in primary care, and now as the Chair of LifeCare Edinburgh, I have witnessed significant changes and challenges (writes LORNA JACKSON-HALL).
The recent impact of financial cuts to third sector care contracts in Edinburgh, along with the recent changes in the Westminster Government, compel me to share some thoughts on short-term solutions as we work towards long-term strategies.
Valuing Our People
It’s crucial to value everyone involved in our health and care systems, both the workforce and those we serve.
The NHS faces immense pressure, primarily driven by the need to manage patient flow into hospitals and expedite their discharge into supportive environments. The workforce crisis, identified over a decade ago, continues to escalate.
An ageing population among clinical staff, coupled with cuts in university courses, training places, and bursaries, has led to a crisis in the number of Allied Health Professionals, Nurses, and Doctors.
Addressing this workforce gap will take approximately ten years as we train and equip new staff with the necessary skills.
Maximising the Potential of the Care Staff Workforce
In the interim, we must focus on our care staff workforce in both social care and the third sector.
It’s essential to examine the health economics of utilising this workforce to its full potential. These dedicated individuals perform incredible work, significantly contributing to keeping people supported in their home environments, thereby delaying or even preventing hospital admissions.
Programmes such as befriending services like Vintage Vibes and buddying services for isolated individuals, play a vital role in enhancing the health and well-being of our older population.
Urgent and immediate increased funding for third sector organisations such as LIfeCare Edinburgh could help to alleviate some of the current pressures on hospitals.
These organisations run meals on wheels, care at home services, and day services, all of which support frail elderly individuals and/or those living with dementia their carers to remain at home longer.
Impact on Hospital and GP Services
Implementing these measures would help reduce the influx of patients into hospitals and improve the discharge process, allowing acute hospitals to focus on reducing elective lists.
This, in turn, would ease the burden on GP Practice services, enabling them to prioritise preventative care. Such a shift is essential to support the growing number of people living with multimorbidity in Scotland today.
By valuing our workforce and maximising the potential of third sector organisations through true partnership working and appropriate funding, we can make meaningful progress in addressing the immediate challenges while laying the foundation for a healthier future.
Growing Climate Confidence has been supported by the Scottish Funders’ Forum
A leading third sector climate project offering vital support to charities and voluntary organisations looking to tackle the climate crisis will be funded for another two years, it has been announced.
This initiative is delivered by the Scottish Council for Voluntary Organisations (SCVO) on behalf of the Third Sector Net Zero steering group, with advisory input from Scottish Funders and Net Zero experts.
The £200,000 awarded will cover strategic support, raising awareness of the campaign, and training provided by others in the sector. Funding has been provided by the Corra Foundation, the National Lottery Community Fund, the Robertson Trust, SSE and the William Grant Foundation.
This new funding – over two years from June 1, 2024 – will provide fully funded carbon reduction and climate resilience training, self-serve digital tools to help organisations develop a net zero action plan, and strategic support to influence the funding landscape for climate work.
Beth Mukushi, SCVO head of support services, said: “The Growing Climate Confidence project helps third sector organisations understand and own their responsibilities to take action on climate change.
“We know that the majority of organisations care deeply about the climate emergency, but only 42% of organisations have policies in place to reduce their own carbon emissions.
“Our net zero scorecard has given over 400 organisations a tailored action plan, and this funding will help us reach more organisations, offer wrap-around training and support, and link organisations into existing networks of climate action across the country.”
Kate Still, chair of The National Lottery Community Fund Scotland, said: “We are delighted to be able to support SCVO in expanding its Growing Climate Confidence Initiative, thanks to funding raised by National Lottery players.
“Through our funding we aim to help communities become more environmentally sustainable and to make the changes that help support a healthy planet.
“SCVO has great experience and expertise in supporting Third Sector organisations to take action on the climate emergency, and the expansion of this initiative will build the momentum and equip many more Third Sector organisations with tools to assist them on their net zero journey.”
An SSE spokesperson said: “The climate emergency is one of society’s most pressing challenges. We know from our community grant making that many third sector organisations want to do their part in tackling it but don’t know where to start.
“The Growing Climate Confidence website and support programme helps them get clarity on what to focus on, and how. SSE is therefore proud to support the roll out and further development of this important work with partners.”
Nick Addington, chief executive of the William Grant Foundation, said: “We believe that all charities and social enterprises have a role to play in helping achieve a fair transition to a sustainable and climate-adapted future – whatever their mission – so we’re really pleased to be able to partner with other Scottish funders to enable SCVO to enhance its support to Scotland’s third sector around climate action.”
EVOC has announced a strategic review that puts a renewed commitment to supporting the community and voluntary sector in Edinburgh at its heart.
The ongoing cost of living crisis is hitting groups and organisations hard and this is a chance to refocus on creating a strong sector for a strong city.
An engagement programme will take place in the coming months, involving the sector in shaping a new EVOC strategy, and to ensure stakeholders are fully briefed on the changes.
After 3 years, Bridie Ashrowan has decided to step down as Chief Executive of EVOC to concentrate on research interests around nature-based learning and biodiversity recovery.
In the meantime, two interims have been appointed to lead EVOC through this period of change – David Peace (Interim Chief Executive) and Claire Ritchie (Strategic Advisor to the Board).
Bridie’s tenure at EVOC has brought many successes. She has been a strong advocate for investment in the community and voluntary sector, to support organisations through the ongoing cost crisis, and to strengthen sector capabilities to lead change.
Against a background of decreased funding and increased running costs, EVOC is focused on reducing costs and delivering a balanced budget for the year ahead. This will include an analysis of the current organisational structure.
EVOC Convenor, Diarmaid Lawlor said:“Firstly, I would like to thank Bridie for her commitment, passion and advocacy for the voluntary sector during her tenure at EVOC and we wish her well in her next ventures.
“Our focus continues to be the wellbeing of the many community and voluntary organisations who play such a vital role in the city. We are working with partners and funders to make sure that remains our top priority throughout this strategic review.”
David Peace added: “As Interim Chief Executive, I will be working with staff, Claire and the Board to refocus our efforts and ensure we continue to support voluntary and community groups in delivering core programmes and activities in the city.
“As a sector leader we remain focused on building a strong, sustainable and resilient future for our sector. I welcome engagement with the sector, partners and funders to help shape the way ahead collectively.”
