Charities 'increasingly concerned over spending cuts'

29 Sep 10
Third sector leaders are less confident about their financial prospects than at any time since the before the recession, a survey has shown.

By David Williams

29 September 2010

Third sector leaders are less confident about their financial prospects now than at any time since the recession, a survey has shown.

The Charity Forecast Survey, published today by the National Council for Voluntary Organisations, found that confidence in the sector is collapsing as the coalition government outlines plans for spending cuts.

Just over half now believe that their organisation’s overall circumstances would worsen over the coming year. Meanwhile, 63% believe that finances will be hit over the same period – a figure that has soared 11 percentage points since Chancellor George Osborne’s Budget in June.

The survey, conducted among directors, chief executives and senior managers of voluntary bodies, found that 21% of respondents are planning to cut jobs in the next three months – up 50% on just three months ago. More than half – 52% - are planning to cut spending over the next year.

One respondent, whose charity was expected to close as a result of government cuts, wrote: ‘The contrast between the rhetoric of the Big Society and the threat to all professional-run local volunteer projects means that the future is bleak for the vulnerable.’

Voluntary sector managers are also increasingly gloomy about the UK economy, with 89% believing that conditions will be negative over the next year. Some 91% are pessimistic about the outlook for charities.

It is the most negative picture to emerge from the survey since it began in February 2008.

Sir Stuart Etherington, chief executive of NCVO, said: 'This latest survey really hits home the widespread concern the sector is feeling about its future prospects.

'It is crucial that the government listens to the sector's concerns. Spending cuts must be managed intelligently, otherwise they will compromise the sector's ability to deliver vital services to the individuals and communities who need them most.’

Stephen Bubb, chief executive of the Association of Chief Executives of Voluntary Organisations, agreed with the findings.

He added that coalition policies on healthcare and drug rehabilitation for criminals are likely to lead to growth for many charities, but that gains are likely to be long-term, while financial difficulties will be more immediate.

‘Already local authorities in particular have been making cuts, reducing budgets in-year, changing contracts,' he said.

'And there is very significant anecdotal evidence from councils that third sector budgets are going to be slashed.’

Bubb also argued that the government’s cuts mantra is drowning out positive messages. 'Ministers are talking about the pain ahead. It’s hardly surprising people in the sector are getting jittery.’

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