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Impact of Austerity on the Voluntary Sector Suzanne Hilton Chief Executive North West CIPFA 11 th April 2014.

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Presentation on theme: "Impact of Austerity on the Voluntary Sector Suzanne Hilton Chief Executive North West CIPFA 11 th April 2014."— Presentation transcript:

1 Impact of Austerity on the Voluntary Sector Suzanne Hilton Chief Executive North West CIPFA 11 th April 2014

2 Hard Times & Great Expectations

3 Challenges arise from a cocktail of an adverse economic climate, a change in political ideology and a shifting policy context : Increasing demand Decreasing funds Rising expectations

4 Voluntary Sector CEOs Birth ratehest since Birth ratehest since A financial cliff edge A perfect storm Triple whammy Harder to speak truth to power

5 Voluntary Sector Contribution £11.1 billion pa (NCVO & ONS) £21.4 billion income from goods and services £14.4 bn staff costs & £18.1bn goods & services 0.8% of UK GVA and more than Agriculture at £8.3bn 70% of charities buy & sell locally- local purchasing 74% go on to offer volunteers paid work (ACEVO) Supports the most vulnerable in society and provides a voice for the voiceless and hardest to hear

6 Funding Source & Influence

7 Greater Manchester £1.7bn GVA- 3.5% of GM 14,592 organisations 23,600 f.t.e staff £1.2bn income each year 330,000 volunteers logging 1.1million hours p.a. Work worth £947m 21.2m interventions of support & advice p.a. 62% income received by only 2% of organisations

8 Greater Manchester Over half received funding from public sector bodies 71 % from local authorities 15 % from local NHS bodies 9 % from national Government Departments. Highlights the importance of relationships with the public sector, particularly local authorities to the sector's work. 39% feel Councils are a positive influence on their organisation's success Only 19 % felt that the business community to be a positive influence

9 Hard Times & Great Expectations

10 Increasing Demand Birth rate highest since 1970s (double 90s, triple 80s) Mortality rate the lowest ever 10.3m 65+s now and set to double by 2041 Fastest growing group 85+ -the most frail 1 in 3 of 65+s will develop dementia NHS spending on retired households is double that on non-retired Forecast additional 10-15% disabled people needing personal care by % increase in use of food banks in last 12 months- 350,000 people received help from the Trussell Trust Year on year increase in calls to Childline from out of 10 charities experiencing a rise in demand.

11 GM Financial Impact Income falling year on year since % expenditure increased but only 34 % could increase income 39% suffered a decrease in income but only 25% could reduce corresponding expenditure 33% eating into their reserves 15% reserve levels of less than one month's expenditure 41% reserve levels of less than three month's expenditure

12 Governance & Delivery Impact Independence under threat Charity Commissioner- significant cuts £29m in 2010/11 £26m in 2012/13 £21m in 2014/15 Focus on compliance moving out of development Loss of distinctive identity- “arm of the state” or a private sector competitor Funder as regulator e.g. DCMS, HCA- stipulating representation on governance boards Easy target- many LAs no longer complying with the Compact- disproportionate cuts

13 Governance & Delivery Impact “So much for Localism - Muscled Out “ Public Procurement Practices- Payment by Results favour the large national corporates some national charities but increasingly G4S, A4E Less competition – impact on quality Further away from the client Local partnerships weakened Voice Silenced- Self censorship- Gagging clauses in Work Programme rolled out to other areas, prevents criticism and restricts publication of data Rowed back on consultation – not reaching hardest to hear

14 Contract Terms Before Values

15 Governance & Delivery Impact Diminished trust among agencies Eroded local capacity to problem solve and innovate Ignored social capital Introduced transactional relationships between service users and providers

16 Survival Tactics 80% charities consider themselves in crisis 1 in 6 considering closure in next 12months 20% actively considering merger Reducing costs- scaling back management Merging back office functions Diversifying income streams/ moving into new markets Consortia Social enterprise and expanding trading activity How do we ensure the right things survive?

17 Where are we now? No return to pre 2008 settlement Survival is not enough- a decade is too long to “cling on”

18 No Pain Without Some Gain Austerity will radically reshape our environment Waving goodbye to SLAs, PSAs, LAAs and Death by targets Opportunity to use austerity to refocus on core values Not funding but investment – the outcomes may be financial, social or both Opportunities for collaboration- cross sector

19 A New Mind Set Be commercially aware but driven by values with the vision and clarity of purpose as the touchstone The age of the Volunteer is back – no longer a dirty word- volunteer professionals not amateurs Voluntary sector to show leadership in redefining public service with the public sector as allies “ Courageous, hardworking people who dedicate their lives to the public good choosing to work without the culture of stratospheric bonuses but recognising outcomes as part of the reward system ”

20 Voluntary sector CEOs Austerity is both an existential threat and a powerful driver for change The Voluntary sector is innovative, flexible, responsive & takes risks but it is not indestructible

21 What can you do to help?

22 Design of commissioning specifications to value local delivery and voluntary sector expertise within procurement guidelines Buy from social enterprises and charities- e.g. Age UK Insurance products and services Donate time and expertise

23 Donate Time & Expertise : Volunteering Helps You: Live longer Protect your mental, physical & emotional health Lessen chronic pain and heart disease Develop solid support systems Protect against stress & depression in challenging times Make friends Learn new skills Advance your career or start a new one Socially, mentally & physically active people live longer, healthier more rewarding lives!

24 Donate Time & Expertise: Volunteer Trustee- bi-monthly evening meetings Marketing and PR – a&w Fundraising- events – a&w Tendering –a&w Befriend a lonely older person- weekly times to suit Information & advice- office hours Insurance & product arrangers –office hours weekdays Receptionists – office hours weekdays Activity leaders- weekdays term time Lunch club cooks and organisers

25

26 Any Questions? or


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