Sector 'faces higher rate of inflation'

The third sector faces an underlying rate of inflation at least two percentage points higher than the base rate, according to a measure run by one charity.

Charles Nall, corporate resources director of the Children's Society, said that the organisation regularly monitored a basket of goods appropriate to charities. The method had measured inflation in the charity sector at about 6.5 per cent over the past year, he said.

"Part of the reason charities face inflation higher than the base rate is wage expectations," he said. "Charities often have long incremental scales similar to those in the public sector.

"Overall, I'd expect to see a drop in charity inflation over the next year. The level of that drop will largely depend on wages."

Charities were hit especially hard by high fuel costs over the past year, and the recent fall in prices would help bring costs down, added Nall.

He said his charity had tried to counter the effect of above-inflation rises by finding cost savings.

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