Since the Pre-Budget Report, I have noticed a distinct change in the nation's mood over the economic downturn. There is now a real sense of the likely effect on individuals and families as well as on the world of finance.
But what of the likely impact on the voluntary sector? There has been intensive work behind the scenes between sector leaders and the Treasury to secure the assets held in Icelandic banks and produce a recession 'action plan'; but what of the fate of charities alongside the public, finance and business sectors?
A recent survey of nearly 400 charities by accountancy firm PricewaterhouseCoopers provides food for thought. Even early on in the downturn, it is worrying that more than 70 per cent of charities surveyed said investment income would fall during the next year and that 50 per cent of charities said corporate donations would also tumble. In contrast, only 28 per cent thought government funding would fall. This news, however, will be of little comfort to smaller charities with incomes of less than £100,000 a year, whose revenue streams are largely from sources other than the state.
But is government funding that secure? Are we in denial? Charities Aid Foundation research after the recession of 1991 to 1993 showed that 45 per cent of charities saw no change in the level of government support, 35 per cent less and only 8 per cent more. But this recession is different. It is global and is focused on money and credit rather than manufacturing and, critically, according to the Pre-Budget Report, sets a new level of government borrowing. It is inevitable that this will have an impact on public expenditure programmes and on third sector organisations that rely on government grants and contract income. The next general election may well be one that nobody wants to win.
Another thing concerns me. Why is the debate so far about the financial impact of the recession on the sector itself, rather than on its beneficiaries? Remember them? I am picking up a nasty whiff of self-preservation, as opposed to bold questions about the interests of people. We need to frame the debate around their needs and what effect it will have on them, not that charity x cannot hold its black tie ball this year. I suspect a number of people will disagree with me, though ...
John Knight is assistant director, policy and campaigns, at Leonard Cheshire Disability: email@example.com