The National Council for Voluntary Organisations has wondered whether 2018 might be the year in which the existing model of public service provision "reaches its breaking point".
In an annual publication setting out the major events and factors that are likely to shape the year ahead for voluntary sector organisations, the umbrella body says deficit reduction and driving growth will remain at the top of the government agenda in 2018.
"Charities cannot ignore the impact that this is likely to have: continuing pressure on public finances will be felt particularly by those who rely on government contracts or grants," it says.
"At the same time, charities will step in to deliver more and more services as the state continues to withdraw its support, exacerbating the issues we have seen emerging over the past year.
"We have already seen a number of charities walk away from public service contracts and rethink how they meet the needs of beneficiaries. The question we may be facing in 2018 is therefore: is this the year that the existing model of public services reaches its breaking point?"
The paper says the year ahead is likely to be dominated by uncertainty, particularly in the political arena, with Brexit bringing as yet unknown regulatory changes, economic implications and yet to be settled issues in areas such as the employment of EU nationals.
The document also warns that smaller charities with annual incomes of between £25,000 and £1m will be particularly vulnerable to reductions in government funding over the year ahead, particularly at the local level.
"While overall the voluntary sector has experienced some growth in statutory income, this has mostly accrued to organisations with an income over £100m," it says. "For small and medium-sized charities, government income remains approximately a third below its pre-recession peak."
The introduction in May of the General Data Protection Regulation is likely to be a major event for voluntary organisations, the paper says.
But despite the challenges, it adds, the sector will still have opportunities, including the chance to influence the government’s new strategy for the sector, with a consultation expected in the next couple of months.
Charities and voluntary organisations, the paper says, will also be able to have their say in the Civil Society Futures inquiry, which is looking at the role of the sector in England over the next 10 years.
It says that, despite the challenges ahead, charities and voluntary organisations will continue to be a pillar for their communities and wider society.
"Organisations such as charities and social enterprises are the key institutions that support local areas, and they are the ones that best understand the needs of the communities they work with," it says.
"They provide the social infrastructure that will be an important part in helping face up to the country’s biggest trials ahead.
"So, despite the challenges, this year could present many opportunities for charities and voluntary organisations, and for the individuals who volunteer with them."