Charities lose £1.3bn in government funding

Ncvo-almanac

UK Civil Society Almanac shows dramatic fall in government funding to charities

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3rd April 2014 by Susan Smith 0 Comments

These figures show that charities bore more than their fair share of these cuts.

Charities across the UK lost £1.3billion in income from government last year as spending cuts kicked in, new figures show.

The data, drawn from charities’ annual accounts, shows that income from government to UK charities fell by nearly 9% between 2010/11 and 2011/12.

The figures show government cut spending with charities at a faster rate than overall spending cuts.

As the vast majority of government income to charities is in return for running public services, the National Council for Voluntary Organisations (NCVO), which released the figures, said it was inevitable charities would be hit by public spending cuts.

However, it has called for the government to review the way public service contracts are awarded, claiming charities are often squeezed out by larger companies.

Sir Stuart Etherington, chief executive of NCVO, said: “Given the government’s deficit-reduction priority, it was inevitable that charities would feel the impact of public spending cuts. But these figures show that charities bore more than their fair share of these cuts.

“The government has set out an ambitious agenda to open up public services, but there is a long way to go before reality matches the ambition. Unfortunately, most charities simply can’t compete with the financial muscle of large outsourcing companies.

“Our members tell us they are at risk of being squeezed out of public service provision as government contracts grow larger, meaning only big companies can afford to bid.”

At present, charities report barriers in public service commissioning including overly large contract sizes, a move to payment-by-results contracts which require potential providers to hold very high levels of capital reserves, and overly bureaucratic procurement practices.

The data comes from the UK Civil Society Almanac 2014. Now in its 18th year, the almanac is published by NCVO on an annual basis and looks at the incomes for charities across the whole of the UK.