Funding cuts

The Government's budget deficit reduction plan has resulted in significant cuts to the sector's funding, leading to severe reductions and even closure of valued community services.

This affects those who depend on their services, as wells as local volunteering opportunities, the capacity for social action and the ability of vulnerable local people to make their voices heard; all crucial to the Big Society. Whilst we support moves to increase private finance, philanthropy and trading, we doubt they will fill the funding gap created by the cuts.

NAVCA's submission to the PASC inquiry on funding (February 2011) sets out the consequences of the cuts in some detail, making clear our concern that many voluntary organisations and community groups are being stretched beyond their capacity to adapt due to:

• the speed with which the cuts are being implemented;
• the 'front loading' of cuts to the local government settlement grants, which is leading to local authorities front loading cuts to the voluntary and community sector;
• the way in which cuts are implemented locally, with insufficient regard given to the impact on the local VCS and the people it serves.

Short term measures, long term pain?

In many places small grants programmes are being cut - a short term measure creating long term pain, particularly for small groups at the heart of the Big Society. Sadly, it appears that the Prime Minister's call for local authorities not to cut funding to voluntary organisations and charities disproportionately has largely gone unheeded.

Even groups not directly affected by the cuts will not go untouched: many receive in-kind benefits or support out of public funds; some face greater competition for increasingly scarce funds as donors' disposable income falls; others will be hit by reduced support services and reduced investment in volunteering.

NAVCA members support over 160,000 local voluntary organisations and community groups, providing advice on establishing groups, fundraising, business planning, commissioning and community involvement. Most NAVCA members currently face substantial funding cuts that will limit their capacity to support local organisations. Some statutory bodies fail to see the effect that these cuts will have on local organisations and communities. The loss of support services makes it more difficult for local people to join, create or develop a charity, social enterprise or community group.

How NAVCA members are adapting

NAVCA members are adapting to the reduced funding environment in innovative ways. For example, Ealing CVS is planning Ealing Involved as a low cost online resource to enable local people to donate time, money, goods and expertise and get involved in community action.

Many members are promoting entrepreneurial activity, whilst others provide back office services that help organisations reduce costs. However such initiatives are unlikely to fully compensate for reductions in funding.