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Charity sector faces 60,000 redundancies due to Covid-19, warn economists 

19 Aug 2020 News

The coronavirus crisis is likely to cost the charity sector 60,000 jobs, an “alarming proportion”, according to new analysis by Pro Bono Economics (PBE). 

PBE, in partnership with the Institute of Fundraising (IoF) and the Charity Finance Group (CFG), has today published the findings from its Charity Sector Tracker. This found that 19% of charities surveyed have already made redundancies and 23% expect to do so in the coming months. 

Its analysis is based on a sample of 455 charities, which were surveyed earlier this month, and follows on from analysis earlier this year which identified a £10bn funding gap. 

Last week the charity think tank New Philanthropy Capital (NPC) launched a redundancies tracker. This collated the 5,400 job cuts that have been announced so far, but the PBE analysis suggests this is just the tip of the iceberg. 

Charities that have already begun redundancy consultations include the Scout Association, Anthony Nolan and Cancer Research UK. 

PBE estimates that 25,600 jobs have already been cut, and that a further 34,100 more people in the sector could lose their job by the end of the year. 

According to the NCVO Almanac, which uses data from the Labour Force Survey, as of June 2019 909,000 people worked in the sector. The number of people employed in the sector has increased by 17% over the last decade, and consistently represented about 3% of the UK’s total workforce.  

Matt Whittaker, CEO of PBE, said: “With the recession biting and unemployment rising, the social sector has never been more needed. But an alarming proportion of jobs in the sector are now at risk. That means many of the charity workers who have provided vital support to millions across the country since the start of the Covid crisis are facing a very uncertain future.”

Mismatch between demand and capacity 

The survey findings also highlight that there is an increasing mismatch between the demands on charities and their capacity to deliver. 

Some 58% of respondents said that they were expecting to cut back services in response to coronavirus. 

However, 59% said demand on their services was likely to increase. 

‘This should ring alarm bells’ 

Most respondents (44%) expected it to take one to two years for income levels to recover, while nearly a quarter anticipate that it will take over two years. 

Whittaker added: “Navigating this period rests in part on getting more resources into the sector, from government, from existing funders and from members of the public. But it also rests on reversing the public policy neglect the sector has suffered from over many years. That’s particularly true if civil society is to play the pivotal role that it should do in the country’s recovery from the pandemic, helping to fulfil the prime minister’s pledge to 'build back better'.”

Caron Bradshaw, chief executive of the Charity Finance Group, said: “Charitable activities and organisations are the glue that keeps communities together and a bridge between the sectors. They want to play their part in the recovery but every day society is closer to losing huge capacity at the heart of our communities. 

“The scale of job losses in the charity sector means less capacity to help people survive loss, hunger, unemployment. Charities are vital to help society through the crisis of Covid and will be essential to the effort to rebuild as we go through a deep-rooted recession and a potential second wave.

“These results should ring an alarm bell for government that without action there is worse to come.”

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