Statutory funding cuts 'will begin in 2010'

Income could fall off a cliff, predicts Third Sector Recession Watch Panel member

Voluntary organisations need to prepare for a steep decline in public sector funding, Third Sector's Recession Watch Panel has warned.

At its second meeting, just before Easter, the panel of third sector experts predicted several years of tight public spending starting in April 2010. Panel member Paul Breckell, executive director of finance and corporate services at the RNID, said statutory income was about to "fall off a cliff: it will have a huge impact".

Fellow panellist Neil Cleeveley, director of policy and communications at local infrastructure umbrella body Navca, said it was vital the sector prepared for a fall in government spending.

"This year's local authority budgets were set largely before things got really bad, but you can guarantee 2010 budgets are going to be really tough," he said. "It's key to start planning now."

Dame Mary Marsh, director of the Clore Social Leadership Programme, said the Government's silence on the comprehensive spending review that should be under way by now was a sign of tougher times ahead.

"The reality checks deciding how public money is going to be spent will be done in a lot less open and transparent way because they are going to have to be," she said. "The consequence of that is there will be less money to go round."

Liberal Democrat councillor Richard Kemp, deputy chair of the Local Government Association, echoed the panel's concerns about reductions in public spending. "Both sides have to be realistic about the fact that there are tough times ahead," he said.

"The important thing is that councils and the sector keep talking to each other."

The warning comes after reductions in voluntary sector funding for 2009/10 by several local authorities, including Warwickshire County Council, which cut its budget by £609,000 (24 February, page 3).

- See Feature, pages 14-15.

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