Chronic underfunding of public services pushing charities to crisis point, NCVO warns

13 Nov 2023 News

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Charities are being “pushed to the brink” by subsidising underfunded public services, umbrella body NCVO has warned.

Research published today by NCVO shows charities are being forced to subsidise underfunded government public services, with 73% of charities surveyed stating they cannot meet demand for the public services they deliver with the funding they receive.
NCVO also published an open letter to the chancellor for charities to sign ahead of the autumn statement calling for increased funding of public services.

Some 40% of charities surveyed said the value of government grants and contracts never covered the true costs of delivering public services, with 87% saying they are subsidising delivery of public service contracts and grants with other charitable income, including public donations.

The membership body states the government relies heavily on charities to deliver vital services – with £16.8bn spent through grants and contracts with charities in 2020-21 – but many charities are facing difficult choices about continued participation in public service delivery.

Since April 2021, 17% of charities have received uplifts to their grants or contracts and 44% have not received any uplifts at all, the report says. 

Some 31% of charities surveyed said they have decided not to bid for a new grant or contract, or are considering not bidding. 

Moreover, 12% have handed back a grant or contract before it finished, or are considering doing so. 

‘The goodwill of charities has been taken for granted’

Sarah Vibert, chief executive 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 surveyed 331 charity and voluntary organisations between 1 August and 8 September 2023. 

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