Charity sector’s crisis warning to Treasury ‘has gone unheard’, says NCVO

01 Mar 2024 News

Jeremy Hunt, chancellor of the exchequer

NCVO has said its warning to the Treasury last year that charities face a “crisis” due to public service underfunding “has gone unheard”.
This week, the Treasury replied to a letter from NCVO which had been signed by more than 1,400 charity representatives, but the sector umbrella body said it failed to respond “to the crux of the issue”.

NCVO’s letter delivered in November urged chancellor Jeremy Hunt to address “continued underfunding of contracts and grants”, which is “putting many charities at crisis point”.

The response from chief secretary to the Treasury Laura Trott on Tuesday mentions a £100m package of government support announced in last year’s spring budget comprising the Cost of Living Fund and VCSE Energy Efficiency Scheme.

It also notes the £900,000 Contract Readiness Fund, which aims to enable charities “to compete alongside other organisations and increase their participation in public service procurement in England”.

NCVO chief executive Sarah Vibert said her organisation was “grateful for these measures” but expressed disappointment about the Treasury’s response overall.

‘Treasury has not responded to the crux of the issue’

“The Treasury has not responded to the crux of the issue – public service grants and contracts are not properly funded to meet the rising cost of delivering them,” said Vibert.

“And the fall out of years of underfunding is creating a crisis in delivery of these services. People who need support more than ever, will slip through the gaps. This stark warning from the charity sector has gone unheard.

“The public services impacted by underfunding of grants and contracts typically aren’t crisis services, which is what the £76m Cost of Living Fund is focused on.

“Instead, they are things like sexual health clinics, social care, and training and skills programmes - crucial services, delivered by charities and organisations with a deep and unrivalled understanding of the communities and issues.

“They empower people to play their full role in their communities, so ensuring they continue to help as many people as possible is crucial.  They are also an investment because they often play a role in preventing people from needing more support or reaching crisis point.”

Ahead of the 2024 spring budget next week, NCVO plans to publish a report “which further sets out the scale of this crisis for charities and communities across the country”.

The Civil Society Group, which includes NCVO, recently warned the Treasury that there had been “very few real improvements in the sector’s operating environment” since the autumn statement in November, leaving “many organisations now facing existential threat”.

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