Nearly two-thirds of charity leaders expect their organisation’s financial situation to worsen over the next year, according to the latest Charity Forecast Survey from NCVO.

The survey is carried out every three months with NCVO members. The report says the latest findings, which involved 123 members, show that charity leaders’ confidence levels in their organisation’s financial situation stand at an all-time low since the survey began three years ago.

It found 63 per cent of respondents felt that the financial situation of their charity would worsen over the next 12 months, compared with 52 per cent three months ago and 35 per cent two years ago.

Further, nearly all respondents (91 per cent) felt that the economic conditions in the voluntary sector would be negative over the next 12 months – the figure represents the lowest net confidence level since the survey began.

For the first time, the survey has also recorded a majority of respondents (52 per cent) expecting to reduce expenditure compared with 33 per cent in June. Some 21 per cent of respondents plan to reduce paid staff over the next three months, an increase of 7 per cent since June.

Commenting on the findings, Sir Stuart Etherington, chief executive of NCVO, said: "This latest survey really hits home the widespread concern the sector is feeling about its future prospects.

"It is crucial that the Government listens to the sector's concerns. Spending cuts must be managed intelligently, otherwise they will compromise the sector's ability to deliver vital services to the individuals and communities who need them most."