The voluntary sector’s income fell by £700m in real terms to £39.2bn in the year to March 2012, according to data published today in the UK Civil Society Almanac, published by NCVO and the Third Sector Research Centre.
Total sector income fell by around 1.8 per cent.
Income from government – the sector’s second largest source of income – fell by £1.3bn in the period, from £15bn to £13.7bn, a drop of 8.7 per cent in real terms.
All other major sources of income increased or remained relatively stable. Income from individuals – the sector’s largest source of income – rose from £16.9bn to £17.4bn, a rise of 3 per cent.
“This is the second time we’ve seen a drop in income due to the recession,” said David Kane, senior research officer at NCVO. “The first time, in 2008/09, the drop was down to everything but statutory income. This time it’s down to statutory income and other sources are rising.”
Charlotte Ravenscroft, head of policy at NCVO, said that the cuts were “worse than the worst case scenario we had previously predicted” and showed that government had made “disproportionate cuts to the voluntary sector”.
She said that the cuts showed a need for the government to change its commissioning and contracting model to better relate to the voluntary sector.
Sector spending also fell in the year in real terms, from £38.5bn to £38bn.
“For me there’s a sense that the sector managed to keep spending even during the time when its income was falling,” Kane said. “But there was a limit to how long that could go on.
“And when voluntary income falls, there is no effect on the amount the sector wants to spend. Whereas when government contract income falls, the amount the sector is required to spend on fulfilling those contracts also falls.”
However sector staffing levels rose during the period covered by the Almanac, from 566,000 at the start of 2002 to 800,000 at the end of 2012.
The Almanac looks at voluntary sector organisations across the UK. It differs from the Charity Commission figures because it excludes many registered charities including independent schools, faith groups, housing associations and charities which are also quangos.
For Charity Finance deputy editor David Ainsworth's in-depth analysis of this year's Almanac click here.