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Impact of Austerity on the Voluntary Sector
Suzanne HiltonChief Executive
North West CIPFA 11th April 2014
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Hard Times & Great Expectations
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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
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Voluntary Sector CEOs
Birth ratehest since
A financial cliff edge
A perfect storm
Triple whammy
Harder to speak truth to power
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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
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Funding Source & Influence
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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
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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
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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.
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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
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Governance & Delivery Impact
Independence under threat• Charity Commissioner- significant cuts
£29m in 2010/11£26m in 2012/13£21m in 2014/15Focus 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
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Governance & Delivery Impact
“So much for Localism - Muscled Out “
• Public Procurement Practices- Payment by Resultsfavour the large national corporates some national charities but increasingly G4S, A4E
Less competition – impact on qualityFurther 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
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Contract Terms Before Values
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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
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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?
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Where are we now?
No return to pre 2008 settlementSurvival is not enough- a decade is too long to
“cling on”
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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
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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”
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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
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What can you do to help?
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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
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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 oneSocially, mentally & physically active people live longer, healthier more rewarding lives!
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Donate Time & Expertise: Volunteer
Trustee- bi-monthly evening meetingsMarketing and PR – a&wFundraising- events – a&wTendering –a&wBefriend a lonely older person- weekly times to suitInformation & advice- office hoursInsurance & product arrangers –office hours weekdaysReceptionists – office hours weekdaysActivity leaders- weekdays term timeLunch club cooks and organisers
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