VSO has confirmed it is reviewing “a number of options” for its future, after reports that the charity will lose millions of pounds in government funding.
The Times newspaper said over the weekend that the government will not renew funding for two major schemes run by VSO when they come to an end this year.
VSO employs around 770 people, according to its latest accounts, and it fears that 200 staff could be made redundant if the funding cuts went ahead. VSO confirmed that redundancies would affect jobs based overseas as well as “many in the UK”.
The Foreign, Commonwealth and Development Office (FCDO) is making cuts to the international development budget but full details are yet to emerge.
Government offered 'little engagement'
A spokesperson for VSO told Civil Society News that the charity hoped some funding would still be agreed with government, but that “in a worst-case scenario” the organisation would have “to start making redundancies and winding down operations and closing offices”.
They added: “We are very much hoping that this won’t be the case, but we have had so little engagement from FCDO so we just don’t know.”
Two major government-funded programmes at VSO are coming to an end this year.
The International Citizen Service, the government’s youth volunteering programme, closed in 2021 after eight years. VSO received £15.3m from the FCDO in 2020 to deliver the programme.
VSO has also been funded to run the Volunteering For Development scheme for the last four years, for which it received £16m in 2020. Government funding for the scheme runs out on 31 March.
The charity said in 2019 that the loss of funding from the two schemes would pose a risk to its income and reputation.
VSO’s total income was £60m last year, down from over £80m in 2016, according to the latest data held by the Charity Commission.
Government grants and contracts represented more than three-quarters of VSO’s total income in 2020, compared with two-thirds in 2016.
In a statement published over the weekend, VSO said: “With less than three weeks to go, VSO is still waiting to hear from the government about the next phase of their grant, which would fund half of our work over the next four years.
“UK government funding would enable us to continue and expand our work supporting girls’ education, building open societies, improving sexual and reproductive health rights, and building inclusive global health systems.
“We are not planning to close in the UK, as has been reported in the media, but we are having to carefully review a number of options.
“With the current cuts to the UK aid budget, we cannot be certain the government will continue to support our work, putting a significant number of poor and marginalised people at risk.
“VSO is a British institution, and volunteering for development is a form of aid that is highly cost-effective, has positive long-term impact in the communities we work with as well as in the UK, and reflects the very best of British values.”
The charity has also encouraged supporters to write to their local MP to protest against potential cuts.