Public spending cuts 'could amount to billions', says Charity Finance Directors' Group

A new report paints a bleak picture for the charity sector. David Ainsworth reports

Office of the Third Sector: provides funding for charities to carry out public services
Office of the Third Sector: provides funding for charities to carry out public services

The charity sector could face cuts of billions of pounds because of reductions in public spending, a report from the Charity Finance Directors' Group has warned.

Public Funding Cuts in the Third Sector: Scale and Implications, written by Kate Hand, policy and campaigns officer at the CFDG, and Antonis Papasolomontos, a researcher seconded to the umbrella group from the Liberal Democrats, says that even in the best-case scenario the sector's funding would be cut by hundreds of millions of pounds.

Voluntary sector organisations receive about £11bn a year from the public sector, according to the report.

The report says the main factors that will affect the size of the cuts will be whether NHS funding is maintained or increased, how cuts are split between departments, whether the third sector remains a priority within government departments and how quickly growth returns to the UK economy.

It is not clear whether the Government will restrict cuts to low-priority areas or reduce all department budgets, it says.

"What is clear is that the third sector collectively is quite low on the list of political priorities, but that some of the areas charities work in are high priorities, such as substance abuse, family breakdown and employment services," the report says.

"Undoubtedly, a number of charities will see a reduction in the level of funds available.

"However, organisations working in areas of high government priority and within a protected budget may experience either an extension of existing funding levels or even an increase. Others will see new opportunities in the form of newly created funding streams."

The report says that in an average scenario the Office of the Third Sector, which provides much of the direct funding received by charities, could lose between £28m and £33m from its budget, but that the Conservatives have already pledged to cut OTS funding by closer to £100m.

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