Public bodies still refusing fair funding to local charities

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New research uncovers the true battle local charities and community organisations still face accessing funding from public bodies

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2nd May 2017 by Susan Smith 0 Comments

A quarter of local charities in Scotland are forced to apply to their council, health board or other public bodies for funding three or more times a year.

New research from the Scottish Council for Voluntary Organisations (SCVO) has revealed the shocking hoops public sector bodies are forcing small charities and community groups to jump through to receive essential funding.

A third of the nearly 400 local voluntary organisations surveyed have an income under £25,000 and 87% have an income under £1 million. The survey found 73% had to apply for running costs every year while 26% had to apply three or more times a year.

The survey uncovered a picture of frustrated and pressurised local charities, many of which are providing essential services such as community youth groups and services for elderly or disabled people.

The vast majority seem to have given up on the idea of three-year or longer funding arrangements. Even though most of the organisations receiving grant funding, as opposed to contract or service level agreement funding, applied for less than £50,000, they only seek funding for a year.

The research also found public funders often refuse to cover the full cost of the service the charities are providing, and in the few cases where longer-term funding is agreed, there were frequent cases of funders refusing to cover inflationary pay increases or other increases in running costs.

Only 56% of grant recipients and 50% of contract or service level agreement recipients said their funding was sufficient to cover core costs for the activity being funded, for example.

The survey findings fly in the face of Scottish Government recommendations to provide three year funding to local voluntary organisations. It suggests councils, health boards and others are still viewing the sector as a cheap option.

It certainly feels like our contribution to [national] outcomes is not valued by local authorities or the Scottish Government - local charity

One local charity said: “Our board felt that the local authority did not understand how difficult things have been for us for years and years of no uplift. They have often cited that the local authority has had to make redundancies and that people were on a freeze for cost of living increase and so the third sector should take a cut. We made the point that we have been taking the cut for years whilst our workload has increased!

“Our charity has demonstrated for years how we have shaved costs, shared costs, and made best use of public monies with a whole host of monitoring and evaluation that is carried out.”

Charities also raised concerns about the complexity of grant applications and the failure of funders to provide feedback when a funding application was unsuccessful.

Some charities spend 10 days or longer on applications for funding that is for one year or less and not even £100,000.

Another charity said: “We need core funding, but this is nearly impossible to come by. This creates inconsistencies in service provision… and employment insecurities for staff who exist on a patchwork of temporary part-time contracts. It certainly feels like our contribution to [national] outcomes is not valued by local authorities or the Scottish Government.”

The report includes a series of recommendations including three-year funding for continuing services and projects, funding that covers minimum wage costs and inflationary uplifts, and a commitment not to withdraw funding for no good reason or because a charity has carried out other fundraising activities.

SCVO policy officer Jenny Bloomfield said: “The reality of funding for local voluntary organisations is a bleak picture of staff trying to do the best they can for vulnerable people in their communities while spending a disproportionate amount of time jumping through hoops for public sector funders.

“Single year funding means staff have no job security, often facing annual redundancy threats, while volunteers and service users have no idea whether the organisation will continue to exist.

“To say that a large public body cannot, where appropriate, commit to longer term funding when eight in 10 applicants are seeking less than £50,000 is absurd.

“SCVO is calling for local funders to up their game and demonstrate their commitment to sustainable third sector community services through fair funding for the third sector.”

A spokesman for the Convention of Scottish Local Authorities said: “Councils are currently constrained by the series of one-year financial settlements they receive from Scottish Government.

"We are fully aware of the benefits of longer-term budgeting and would like to pass on these on to the third sector, but that has to start with government giving councils longer term settlements.” 

Read Jenny Bloomfield's blog on this issue on the SCVO website.

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