Editorial: Figures confirm a changing sector

The UK Civil Society Almanac reveals the impact that the economic downturn and the government's ever-tightening spending cuts are having on charities, writes Stephen Cook

Stephen Cook writes that, despite a fall in income from government, figures on individual giving are encouraging
Stephen Cook writes that, despite a fall in income from government, figures on individual giving are encouraging

Over the past few years, most people in the sector have realised, one way or the other, that a sea change is taking place.

We now have the firmest actual evidence of this so far in the form of the UK Civil Society Almanac 2014, published by the National Council for Voluntary Organisations.

The figures in the new volume are for the year 2011/12, when the combination of the continuing effects of the economic downturn and the government's ever-tightening spending cuts resulted in a fall both in the sector's income and in its expenditure. This was the year when the sector demonstrably began to shrink.

Most significant was the fall in income from national and local government, down by £1.3bn to £13.7bn in real terms on the previous year. There are several elements to this: direct subsidies, now vanishingly small; grants, which get smaller every year; and income from contracts.

The latter, trumpeted by politicians as the brave new world, are a growing part of statutory income, but are yet to really take off. Sir Stuart Etherington of the NVCO warns that big private companies consistently out-muscle charities, and Sir Tony Hawkhead, in a recent interview with Third Sector, gives examples of the ridiculously impractical conditions local authorities have tried to impose on his charity Action for Children. Clearly, fair commissioning practices are still far from the norm.

The most encouraging figure was on giving by individuals. It was up in real terms by 3.1 per cent to £17.4bn, although this was not enough to cancel out the 8.8 per cent fall from government. Donations are under pressure and no one has found the key to produce significant growth, but they are still the mainstay of good causes in the UK.

What of the future? Perhaps the most intriguing chart is the one showing that sector income in 2011/12 fell further in percentage terms than government spending generally. This indicates that the NCVO was too optimistic in its recent worst-case prediction that government income would be down to £11.8bn by 2017/18. Hang on to your hat.

- Read our analysis of the UK Civil Society Almanac data

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