Counting the Cuts: Plan for the Worst, Hope for the Best

Today NCVO publishes an update to our 2011 Counting the Cuts report, looking at the scale of cuts so far and those still to come.

With the Chancellor pencilling in further cuts between 2015 and 2018, NCVO have extended our previous forecast by three years. We can now estimate that charities’ income from government will be £1.7bn (12%) lower in 2017/18 than it was in 2010/11, if cuts are made proportionately. But there is evidence already that cuts aren’t being made proportionately. And even where they are, whether in Newcastle or London, the statistics belie the real impacts on people.

However, the deepest cuts are now forecast to fall the other side of the general election. This gives rise to an obvious question: will they actually go ahead?

An incoming government – of whichever party or parties – will set out new spending plans. Even if they decide to continue with austerity, it may be difficult to find further savings of the magnitude implied by the OBR’s current forecasts. Different options may be considered: spreading the cuts out over a longer period of time or taking an invest-to-save approach.

There may also be new opportunities that emerge between now and the election. An improvement in commissioning practice could make a big difference. To do this, the Government needs to put much more oomph behind key initiatives. The Commissioning Academy needs to be a high-quality training experience that reaches not only commissioners, but their procurement and legal colleagues too. The Social Value Act – which gives commissioners the green light to consider added social, economic and environmental benefits – needs to be implemented with vigour. There are positive signs that the Government has learnt lessons from the Work Programme, and is now considering a more nuanced approach to payment-by-results and future welfare-to-work spending. As ever, ensuring that voluntary organisations are engaged in policy design will pay dividends when it comes to delivery.

Given these variables, Counting the Cuts should be seen as an ongoing project. We are concerned about the cuts so far, particularly early indications that the sector has been hit hard by disproportionate cuts. And we are concerned about the trajectory for further cuts that is implied by current economic policy. It would be naïve to imagine that government spending will ‘bounce back’; and we would advise charities to prepare for the long-haul.

But we are not about to give up. Charities are adapting, diversifying, innovating, partnering, investing, challenging, fundraising and doing what they’ve always done, putting people first. Add a more favourable economic and commissioning environment, and things could look rather differently in a year or two from now.

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Charlotte Ravenscroft was NCVO’s head of policy and public services. Charlotte’s wrote about funding, public service delivery, and strengthening the evidence base for voluntary action. She has also worked at the Big Lottery Fund and the Department for Education.

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