Comment: More cuts on the way but where is the sector's coherent resistance?

Local charities that receive government grants face a turbulent future, but what can be done to help them, asks our columnist

A lot of small charities, and the people and places they care about, have had a perfect storm of problems since the financial crisis began. This has not only made fundraising harder, but investment income has also been volatile, interest rates are at rock bottom and - worst of all - local authorities have seen their budgets slashed

It often seems that local authorities can do no right in the eyes of national politicians and the government. Ministers make it seem, no matter what the reality, as if central government funding can be easily and harmlessly cut with little effect on services or local people - 40 per cent down from 2010 to 2015 alone. And there are more cuts to come. Compare that with the NHS - its budgets are being increased remorselessly.

Ask any local charity that gets grants or contracts from a local authority (or from central government departments for local services) and they will say how devastating the cuts are. Many face a dilemma: campaign against cuts to their beneficiaries or try to secure funding in a new regime. They rarely have the resources to do both.

Our new report, Challenging Cuts, on how organisations are responding to this austere new world, describes a number of other dilemmas. One is that even where budgets don't change, styles of procurement and commissioning do. This typically means that tendering is more complex, favouring those organisations with greater financial resilience and enough people to navigate the byzantine processes. This tends to favour larger organisations, for-profit or not.

Another feature of funding arrangements for local charities is that revenue funding is falling, but capital funding is plentiful. Not only has infrastructure capital spending held up or even increased, but there are also capital funders specifically for charities, such as Big Society Capital. This is good news for those organisations that can use capital funding, but this isn't the case for many local charities - they need revenue funding today to deliver services today.

One of the most revealing and depressing features of our research in this area is how the sector has responded to front-line service cuts. Overseas development secured a ring-fenced overseas aid budget of 0.7 per cent of our GDP, but front-line services have been hit all over the ballpark.

Indeed, we can find little evidence of a coordinated attempt to fight front-line service cuts. Some specific sectors, such as transport, have successfully coordinated and supported local campaigning, but we could find no evidence of any meetings or conferences in the past few years to talk about how to fight funding cuts. There are scarce resources about fighting local authority funding decisions, though there are some about funding in general.

One reason for this lack of a coordinated response is that sector infrastructure bodies have also seen their funding cut, which can only weaken their ability to support their members. Another reason is that local funding covers such a vast range of causes and organisations that it can be hard to join up the dots and link the impact on disparate local charities and the beneficiaries.

One thing is clear: more cuts are to come. So if we want local charities, their beneficiaries and services to survive, we need to work out how to help them weather the storms ahead.

Joe Saxton is the founder and driver of ideas at the research consultancy nfpSynergy


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