1. Funding for the Local Voluntary and
Community Sector: How do we respond to
the cuts?
Address to East Midlands Funding Advice Conference on 8
July 2010 by Kevin Curley, NAVCA’s Chief Executive
I would like to say something about the impact of the recession and Government cuts
on the local voluntary and community sector. Then I want to talk about the Coalition’s
programme for Government – the opportunities it presents and some of the difficulties.
Finally, I want to offer some views on how leaders of local voluntary organisations and
funding advisers should respond.
I will refer to a number of sources over the next 20 minutes or so. You will find them all
referenced in the transcript of this speech which is on the NAVCA website.
As we emerge from the longest post-war recession on record the evidence suggests
that the recession has been very difficult for many voluntary organisations. The latest
Civil Society Almanac looks at the impact of the economic downturn on the sector in
2009. This evidence is largely perception based. Medium sized voluntary organisations
are defined as those with a mean income of around £300,000. 49% of these
organisations say that the recession had a significant or very significant impact on them.
Small organisations are defined as those with a mean income of around £35,000. 29%
say that the recession has had a significant impact or worse. Micro organisations are
defined as those with a mean income of around £3,000. Here 22% of organisations
report a significant impact as a result of the downturn. It’s clear then that the recession
has hit medium sized organisations most. We are talking here about the Citizens Advice
Bureau with six staff and fifty volunteers, a Home-Start organisation with five staff and
seventy volunteers or a Volunteer Centre with four staff recruiting and placing 3,000
volunteers in 2009. Overall then around half of these organisations were badly hit by the
recession. 1
We do not have the benefit of this sort of data as yet in relation to cuts in public
expenditure. But we have the evidence of our own eyes and we know quite a lot about
the extent of statutory funding going into different sorts of voluntary organisation. £6.2
billion of cuts were announced shortly after the Election. As a consequence a whole
1
UK Civil Society Almanac 2010 (page 40) www.ncvo-vol.org.uk/almanac
NAVCA (National Association for Voluntary and Community Action), The Tower, 2 Furnival Square, Sheffield S1 4QL
Tel 0114 278 6636 ● Fax 0114 278 7004 ● Textphone 0114 278 7025 ● navca@navca.org.uk ● www.navca.org.uk
Registered charity no. 1001635 ● Company limited by guarantee ● Registered in England no. 2575206 ● Registered office as above

2. range of programmes were hit which support local voluntary action. The Future Jobs
Fund has gone. Working Neighbourhoods Fund has taken a big hit. Supporting People,
Legi – the Local Enterprise Growth Initiative, Prevent, Cohesion, Connecting
Communities – the list is a long one. Migrant Impact Fund looks as though it will go from
the end of September. The Reward Grants associated with Local Area Agreements
have been badly hit. We know that Grassroots Grants will end next March. Before then
we will begin to see how the budget cuts of £32 billion will impact on us and what the
Comprehensive Spending Review will bring.
We know already that local government finance faces big reductions. Only last week I
learned that Kirklees Council has cut a voluntary sector support programme worth
£800,000 over the next three years. I heard yesterday that Croydon Borough Council –
a winner of two Beacons for its work with the voluntary sector – has cut grants by 66%,
(from £1.8 million to £600,000). By now I imagine many of you will have your own local
examples.
In fact can I ask for some input from you all right now. How many people here are
employed by a voluntary organisation? How many of you know already of cuts in
funding to your organisation this year? How many of you are volunteers in local
organisations or trustees of local charities? Again, how many of you know of cuts
affecting your organisation this year?
I think it is local organisations with incomes over £100,000 and below £400,000 which
will be hit hardest – especially where they have enjoyed strong support from the local
authority and the Primary Care Trust in particular. How many people here are primarily
concerned with local organisations with an income in this range - £100,000 - £400,000?
But the damage will not be equally spread of course. Employment and training charities
received 70% of their income in 2007 (the last year for which figures are available) from
statutory sources. For social services charities this percentage fell to 50% and for
culture and recreation charities to 25%.2
Let us now look at the Coalition’s programme for Government. This incidentally is a very
readable document. Just 32 pages – in less than one hour you will identify all the
commitments which will impact on the local voluntary sector. So, a good way to spend
one hour of your time.3
Let’s go straight to Chapter 27 entitled Social Action.
2
UK Civil Society Almanac 2010 (page 44) www.ncvo-vol.org.uk/almanac
3
The Coalition: Our Programme for Government – published by H M Government in May 2010 -
http://www.cabinetoffice.gov.uk/media/409088/pfg_coalition.pdf
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3. We will support the creation and expansion of mutuals, co-operatives, charities
and social enterprises and enable these groups to have much greater
involvement in the running of public services.
We will train a new generation of community organisers and support the creation
of neighbourhood groups across the UK, especially in the most deprived areas.
We will take a range of measures to encourage charitable giving and
philanthropy.
We will introduce National Citizens’ Service. This will provide a programme for
16 year olds to give them a chance to develop the skills needed to be active and
responsible citizens.
We will use funds from dormant bank accounts to establish a Big Society Bank
which will provide new finance for neighbourhood groups, charities, social
enterprises and other non-governmental bodies.
We will take a range of measures to encourage volunteering and involvement in
social action, including launching a national day to celebrate and encourage
social action.
In the Jobs and Welfare chapter we find:
We will develop Local Work Clubs – places where unemployed people can
gather to exchange skills, find opportunities, make contacts and provide mutual
support.
We know already that these will be voluntary organisations with a high level of volunteer
input.
In the Local Government chapter we find:
We will introduce new powers to help communities save local facilities and
services threatened with closure and give the communities the right to bid to take
over local state-run services.
I won’t quote any more from the programme but if you look in the chapters on the NHS,
Jobs and Welfare, Culture Media and Sport, and Justice you will see commitments to
provide new opportunities both for voluntary organisations and private companies to bid
for state money to provide services. A common theme is what some have characterised
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4. payment by results. Especially where the aim is to get people back into work or to
reduce reoffending.
The Big Society is a big tent which seems to house many of the new Government’s
proposals. The Office for Civil Society has set itself three objectives:
• To make it easier to run a charity, social enterprise or voluntary organisation
• To get more resources into the sector – social investment, giving and
philanthropy
• To make it easier for sector organisations to work with the state. 4
However, Lord Wei the Government’s Adviser on the Big Society uses new language,
new concepts, in a recent paper on the Big Society website.5
In his paper Lord Wei acknowledges the work of organisations like NCVO and NAVCA
but says:
There is a need for an organisation which helps ordinary citizens, especially
those who are not used to, or have limited experience of, social action, to get
engaged.
He proposes the creation of the UK’s biggest mutual – a union for citizens called Your
Square Mile. The aim is to increase the proportion of citizens engaged in social
action/civil society by a factor of ten over five years. We will work with Britain’s
thousands of social entrepreneurs, community organisers and active citizens. We will
support them by helping to create a culture of civic engagement, working with opinion
leaders throughout society and the media.
Lord Wei is very close to Cameron who has said his legacy will in part be to build the
Big Society.
We need to look at this in the context of the Coalition’s commitment to the Big Society
and to a smaller state. Keep in mind the commitment in the Local Government section
of the Coalition Programme:
We will introduce new powers to help communities to save local facilities and
services threatened with closure.
4
Cabinet Office: Structural Reform Plan published June 2010 (Chapter 6)
http://www.cabinetoffice.gov.uk/media/414879/srp-cabinet-office.pdf
5
The Big Society Network: http://www.thebigsociety.co.uk/
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5. In my view, the support and development services provided by NAVCA members all
over England will be vital to the delivery of the Big Society. Our dilemma is that many
development worker and funding advice posts are under threat from funding cuts.
How do we respond to all this? If I am right about the impact of the cuts building on the
impact of the recession then for many of us the next nine months will be dominated by
reducing the services we provide, losing staff and losing volunteers. If we are to protect
what matters most to our communities we will need to select the battles to fight. Many of
us have good relationships with elected councillors and with officials in local
government and the local NHS. Many of these people will continue to be our allies. But
of course many of them will be competing with us for reduced resources and will have
more opportunities than we do to influence the selection of local priorities – within Total
Place or whatever replaces it. So, we must continue to engage with the Local Strategic
Partnership and with Scrutiny Committees. We must continue to tell our stories. I am
convinced that good case studies, good anecdotes describing how local voluntary
services help people and how those people will be damaged if the services disappear,
are just as powerful as outcome studies. There is a particularly powerful story to be told
about local organisations which make extensive use of volunteers. If a grant of £50,000
enables 70 volunteers to provide 140,000 hours of family support services each year,
removing the need for at least some expensive child protection work, then it should be
possible to convince decision-makers not to cut this service. This is probably as
convincing for many Councillors as a more robust outcomes approach would be.
We must respond to arbitrary cuts – those which are unfair or which seem to favour the
local authority’s own services for no good reason – with vigorous campaigning. We
must use the Compact. We must use public law challenges as a last resort if cuts are
made without proper consultation or without Equalities Impact Assessments taking
place.6 The threat of judicial review often gets funders to the table. I commend today’s
Empowering the Voluntary Sector newsletter which focuses on challenging the cuts. It’s
on NAVCA’s website.
In all this you have a right to expect strong leadership from your local support and
development organisation. Indeed, you must demand this – whether from a CVS, a
Rural Community Council, a Development Trust or a BME infrastructure organisation.
But continued engagement with the people who have become our partners over the last
decade is vital. They will be under enormous financial pressure just as we are. They will
want to protect their own services but many of them will know how vital our work is too
for disadvantaged communities. We cannot argue for participative democracy when
times are good but retreat to representative democracy when times are bad. So, just as
6
NAVCA: Empowering the Voluntary Sector
http://www.navca.org.uk/services/learningopps/evs/evsnewsletter.htm
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6. we argued that the voluntary sector must shape priorities during a decade when new
money came into our communities so now we must help to shape the priorities as
services go into sharp decline.
I mentioned that the Office for Civil Society has set itself three objectives. The second
is to get more resources into the sector. The same challenge applies to us all. Many of
us have expanded our organisations, employing more people. We are now going to
employ less. We must rediscover our enthusiasm for volunteers. Back in the early 80s
when I was running Hull CVS in hard times, our newsletter was written by a volunteer.
Our Volunteer Centre was run by a volunteer. Paid staff enabled us to do a lot more
work but if the money is not there we must make more creative use of volunteers. We
must look for new ways of relating to the local private sector. Corporate social
responsibility has grown enormously over the last ten years, led by corporate giants like
Sainsbury, Zurich and IBM. We will need to find new ways of matching their corporate
engagement strategies with community needs.
Too many local charities are not making proper use of Gift Aid. Possibly as much as
£500 million is lost to local charities because Gift Aid is not claimed.
I suspect there will be little work for Funding Advisers to do in terms of helping
local charities to access statutory funding. And the days of sending someone off
with a list of trusts from Funder Finder must be over. It creates the illusion of
funding opportunities and wastes everybody’s time. Instead roles are going to
change to look more like those of development workers from a funding and
finance perspective. Let’s take the example of personalisation in social care. How
many people here would be comfortable in advising a local social care charity
about the new business models required by personalisation? How many advisers
are comfortable discussing collaboration and merger options? How many
advisers would be able to distinguish clearly between a full merger and the
creation of a group structure for local charities and to help people examine the
benefits and the risks of both? This I suspect is the future for funding advice.
We must make creative use of social media such as Twitter and Facebook. They can
both be powerful tools for campaigning and for fundraising.
We must help local charities and groups to make best possible use of the Big
Lottery Fund. This will become an even more crucial funder in the future and
NAVCA is working hard to persuade BIG to put more money into Awards of All,
Reaching Communities and other demand-led funding programmes. It’s great to
see Big Local announced. £200 million in grants for community groups in fifty
areas. It looks almost certain that the Government will reduce the Big Lottery
Fund’s share of good causes money from 50% to 40% over the next two years.
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7. The shares going to sport, arts and national heritage will increase from 16% to
20%. The consequences may not be as damaging as you first think. The
Government also proposes to require BIG to spend 100% of its funding on the
voluntary and community sector. And BIG funds will increase after the Olympics
are over. But if you share my view that the increased shares of good causes
money going to arts and sports should go to community projects and not to elite
sport and high art do please respond to the DCMS consultation before 21 August.
A link to the consultation document can be find in the transcript of this speech.7
Not every service can be sold but we know that some local organisations have
been much more successful than others at generating their own income. We will
need to challenge assumptions. No-one expects to get a place on a training
course now for nothing. Nobody expects to ride in a Community Transport
minibus for nothing. Nobody expects a Home Help to come without making some
contribution. We must test every service we are providing with the question can
we make a charge for this? Can at least some people pay for this service?
In the familiar world of charity shops are you certain that local charities are getting the
benefits from Gift Aid? I live in Derby in this region. When I take books or clothes to a
charity shop I am never asked whether I am a taxpayer. So, these charities are literally
throwing away thousands of pounds worth in donations.
Mention of charity shops prompts me to say that we will have to be better at helping
people to rediscover old fundraising skills. Organisations will be much smaller. So,
money raised from street collections, sponsored events and auctions of private sector
donations in kind will become more significant. These are probably funding options
many of us have not considered in recent years – the years of Government generosity.
Finally, we must respond to new contracting opportunities of the sort I mentioned in
the Coalition Programme. NAVCA always argues that local authorities and the local
NHS should use grants to support local voluntary action in many instances. However, if
contracts are on offer and are to be awarded competitively we must improve our
tendering skills. We need to get staff, volunteers and trustees, trained up to
understand commissioning and procurement procedures. We may need to put new
structures in place and to work in new ways with other local organisations with shared
interests.
There are hard times ahead without doubt. I think many local charities will reduce in
size over the next eighteen months as the cuts deepen. But we all have shared
7
http://www.dcms.gov.uk/consultations/7070.aspx
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8. responsibility to articulate what is happening in our communities and to use
every opportunity at our disposal to protect our most vulnerable citizens.
Kevin Curley
Chief Executive
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