Impact of Austerity on the Voluntary Sector
Suzanne HiltonChief Executive
North West CIPFA 11th April 2014
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Hard Times & Great Expectations
Hard Times & Great Expectations
Challenges arise from a cocktail of an adverse economic climate, a change in political ideology and a shifting policy context:
• Increasing demand• Decreasing funds
• Rising expectations
Voluntary Sector CEOs
Birth ratehest since
A financial cliff edge
A perfect storm
Triple whammy
Harder to speak truth to power
Voluntary Sector Contribution
• £11.1 billion pa (NCVO & ONS)• £21.4 billion income from goods and services• £14.4 bn staff costs & £18.1bn goods & services
• 0.8% of UK GVA and more than Agriculture at £8.3bn• 70% of charities buy & sell locally- local purchasing• 74% go on to offer volunteers paid work (ACEVO)• Supports the most vulnerable in society and
provides a voice for the voiceless and hardest to hear
Funding Source & Influence
Greater Manchester
• £1.7bn GVA- 3.5% of GM
• 14,592 organisations
• 23,600 f.t.e staff• £1.2bn income each year
• 330,000 volunteers logging 1.1million hours p.a.• Work worth £947m
• 21.2m interventions of support & advice p.a.• 62% income received by only 2% of organisations
Greater Manchester
• Over half received funding from public sector bodies• 71 % from local authorities• 15 % from local NHS bodies• 9 % from national Government Departments.• Highlights the importance of relationships with the
public sector, particularly local authorities to the sector's work.
• 39% feel Councils are a positive influence on their organisation's success
• Only 19 % felt that the business community to be a positive influence
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Hard Times & Great Expectations
Increasing Demand
• Birth rate highest since 1970s (double 90s, triple 80s)• Mortality rate the lowest ever• 10.3m 65+s now and set to double by 2041 • Fastest growing group 85+ -the most frail• 1 in 3 of 65+s will develop dementia• NHS spending on retired households is double that on
non-retired• Forecast additional 10-15% disabled people needing
personal care by 2020• 170% increase in use of food banks in last 12 months-
350,000 people received help from the Trussell Trust• Year on year increase in calls to Childline from 2008• 9 out of 10 charities experiencing a rise in demand.
GM Financial Impact
• Income falling year on year since 2009• 47% expenditure increased but only 34 % could
increase income• 39% suffered a decrease in income but only 25%
could reduce corresponding expenditure• 33% eating into their reserves• 15% reserve levels of less than one month's
expenditure• 41% reserve levels of less than three month's
expenditure
Governance & Delivery Impact
Independence under threat• Charity Commissioner- significant cuts
£29m in 2010/11
£26m in 2012/13
£21m in 2014/15
Focus on compliance moving out of development • Loss of distinctive identity- “arm of the state” or a
private sector competitor• Funder as regulator e.g. DCMS, HCA- stipulating
representation on governance boards• Easy target- many LAs no longer complying with the
Compact- disproportionate cuts
Governance & Delivery Impact
“So much for Localism - Muscled Out “
• Public Procurement Practices- Payment by Results
favour the large national corporates some national charities but increasingly G4S, A4E
Less competition – impact on quality
Further away from the client
Local partnerships weakened
• Voice Silenced- Self censorship- Gagging clauses in Work Programme rolled out to other areas, prevents criticism and restricts publication of data
• Rowed back on consultation – not reaching hardest to hear
Contract Terms Before Values
Governance & Delivery Impact
• Diminished trust among agencies
• Eroded local capacity to problem solve and innovate
• Ignored social capital
• Introduced transactional relationships between service users and providers
Survival Tactics
• 80% charities consider themselves in crisis• 1 in 6 considering closure in next 12months• 20% actively considering merger• Reducing costs- scaling back management • Merging back office functions• Diversifying income streams/ moving into new
markets• Consortia• Social enterprise and expanding trading activity
How do we ensure the right things survive?
Where are we now?
No return to pre 2008 settlement
Survival is not enough- a decade is too long to “cling on”
No Pain Without Some Gain
• Austerity will radically reshape our environment
• Waving goodbye to SLAs, PSAs, LAAs and Death by targets
• Opportunity to use austerity to refocus on core values
• Not funding but investment – the outcomes may be financial, social or both
• Opportunities for collaboration- cross sector
A New Mind Set
Be commercially aware but driven by values with the vision and clarity of purpose as the touchstone
The age of the Volunteer is back – no longer a dirty word- volunteer professionals not amateurs
Voluntary sector to show leadership in redefining public service with the public sector as allies
“ Courageous, hardworking people who dedicate their lives to the public good choosing to work without the culture of stratospheric bonuses but recognising outcomes as part of the reward system”
Voluntary sector CEOs
Austerity is both an existential threat and a powerful driver for change
The Voluntary sector is innovative, flexible , responsive
& takes risks but it is not indestructible
What can you do to help?
What can you do to help?
• Design of commissioning specifications to value local delivery and voluntary sector expertise within procurement guidelines
• Buy from social enterprises and charities- e.g. Age UK Insurance products and services
• Donate time and expertise
Donate Time & Expertise:
Volunteering Helps You:• Live longer • Protect your mental, physical & emotional health • Lessen chronic pain and heart disease• Develop solid support systems• Protect against stress & depression in challenging times• Make friends• Learn new skills• Advance your career or start a new one
Socially, mentally & physically active people live longer, healthier more rewarding lives!
Donate Time & Expertise: Volunteer
Trustee- bi-monthly evening meetings
Marketing and PR – a&w
Fundraising- events – a&w
Tendering –a&w
Befriend a lonely older person- weekly times to suit
Information & advice- office hours
Insurance & product arrangers –office hours weekdays
Receptionists – office hours weekdays
Activity leaders- weekdays term time
Lunch club cooks and organisers