Charities’ confidence hits record low as cuts loom

Impending public spending cuts have left charity leaders’ confidence in their financial future at a record low, according to a survey published today by sector body the National Council for Voluntary Organisations.

As the sector prepares for the impact of substantial cuts in public funding next year, NCVO’s quarterly charity forecast survey found 69% of bodies believe their financial situation will worsen over the coming 12 months, up from 63% in the previous quarter.

Over a quarter (26%) plan to reduce staff numbers over the coming quarter, up from 21% in the previous survey. The latest poll was taken in October and November, and the results are the worst in the three-year history of the survey.

NCVO chief executive Stuart Etherington warned that the findings showed that the government’s Big Society vision of empowering volunteers and communities to run public services could be undermined by cuts to the voluntary sector.

“It is crucial that the government takes heed of these concerns if it wants the sector to play a full role in delivering the Big Society agenda,” he said. “Spending cuts must be managed intelligently, otherwise they will compromise the sector’s ability to deliver vital services to the individuals and communities who needs them most.”

The survey comes a day after NCVO published the final report of its Funding Commission, which set out a vision for a financially sustainable future for the voluntary sector over the next 10 years.

This report also raised concerns about the impact of public spending cuts on the Big Society, but said that the sector had the potential to double donations by individual to £20bn a year by 2010 and increasing commercial income by £10bn over the next decade.

This would require charities becoming better at demonstrating their impact, improving their financial capability and collaborating with each other more, but the report said this required support from government, including finance.

The government has launched a Transition Fund worth £100m to support charities at risk of cuts, but critics have warned this is insufficient.

Meanwhile, voluntary sector leaders today launched a commission to help shape the government’s Big Society vision.

The Commission on Big Society, which includes figures from across the political spectrum and the voluntary sector, will examine the practical steps that government and charities will need to take the Big Society a reality.

The body, which has been formed by charity leaders’ body the Association of Chief Executives of Voluntary Organisations (Acevo), is headed up by Lord Rennard, former chief executive of the Liberal Democrats.

Rennard said: “Big Society presents exciting opportunities for civil society and the country more broadly but it’s crucial that we think through the practical actions needed to make it work.

“It is important that this thinking takes place not just within the confines of Whitehall but encompasses the views of leaders from across civil society.”

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