Government underfunding puts charities and public services at risk

CHRONIC underfunding of public services is pushing charities to crisis point, new research by the National Council for Voluntary Organisations (NCVO) has revealed.

The government relies heavily on charities to deliver vital services – with £16.8 billion spent through grants and contracts with charities in 2020/21. But increasing demand and higher operating costs, combined with no contract uplifts in line with inflation, means many charities are facing difficult choices about continued participation in public service delivery.

The latest NCVO research exposes the scale of this issue, with 73% of charities surveyed reporting they cannot meet the current demand for the public services they deliver with the funding they receive.

For over a decade, charities have repeatedly warned that contracts and grants are not increasing in line with inflation. The new data found that 40% of charities have never received enough funding to deliver the public services asked of them.

Since April 2021, less than one in five (17%) charities have received uplifts to their grants/contracts and almost half (44%) have not received any uplifts at all.

87% of charities said that they have to subsidise the delivery of their public service contracts grants with other charitable income, including public donations (67%), charity shop income (25%), and their own financial reserves (11%).

Sarah Vibert, CEO of NCVO, said:

“Charities and voluntary organisations are the foundations of public service delivery, providing vital support to people and communities. Many services, like homelessness interventions and support for victims of domestic violence or sexual abuse, wouldn’t currently exist without charities.

“For too long, the goodwill of charities has been taken for granted. Commissioners know charities will do everything possible, including subsidising public services with charitable funds, to prevent closing their doors to someone. But this can’t continue. Charities are at crisis point and without increased funding public services are increasingly likely to cease, putting potentially millions of people at risk of not having their needs met.”

NCVO is calling on the government for urgent support

The release of this latest research follows the recent launch of NCVO’s Cost of Giving Crisis campaign, which aims to create awareness of, and calls for action to support, struggling charities this winter.

NCVO is calling on the chancellor to commit to properly funding public services delivered by charities in this year’s autumn statement.

Charities across the country can make sure their voice is heard by co-signing NCVO’s open letter. By coming together to call for support, we can help ensure charities get the urgent support needed to help them continue providing the public services communities desperately need.

Charities and voluntary organisations can sign the letter here: https://www.ncvo.org.uk/news-and-insights/news-index/open-letter-to-chancellor-on-charity-funding/.