Charities braced for spending review 2015

As the Spending Review approaches, NCVO will be looking at what the potential impact is for charities. Stay up to date with all our analysis by following @ncvo #sr2015 on Twitter.

Cuts and commissioning

This month saw the latest closure of a highly regarded specialist charity. Women’s charity Eaves supported victims of trafficking, those leaving prostitution and those experiencing sexual violence. In its closing statement, Eaves said:

It is not purely and simply cuts that are at play. It is abysmal commissioning whereby commissioners either do not know or do not care what they should be looking for or how to assess a bid other than by lowest unit cost with no regard to quality.

This is the same story that NCVO members are telling across the country. As we approach the Spending Review, it is worth reflecting not only on what the financial settlements will be (watch out for more blogs posts on this soon), but also what the knock-on impact for charities that deliver public services will be if current commissioning trends continue and accelerate.

Local authorities

Local authorities find themselves in an extremely difficult position. Speaking today, Jill Rutter from the Institute for Government said that the Spending Review will further compound pressures on local government:

At Oxfordshire’s annual voluntary sector conference earlier this month, senior commissioners explained that they are being cut to the point where they can only deliver their core statutory obligations. They aspire to work with the voluntary sector to redesign their remaining services. But the message was clear: (almost) everything else must go.

Specialist organisations at risk

Organisations that serve a particular community of interest – BME groups for example – appear to have been particularly hard hit by cuts over the last five years. The combination of ever-larger contracts and changing local commissioning arrangements has made it increasingly difficult for these specialist organisations to secure funding for their work.

A typical example is a local deaf centre, which saw its contract to provide support for British Sign Language users rolled into one that covers all languages spoken locally. Similar moves are undermining the viability of many organisations that cannot deliver such large contracts, or who would risk not meeting their costs as a subcontractor.

Even national specialist charities face challenges in navigating the current commissioning landscape. For example, the National Aids Trust (NAT) advocates for people with HIV status. Often these individuals’ needs may be overlooked at a local level, particularly if they are reluctant to access services in their own area.

In tough financial times, supporting specialist charities’ advocacy and representative functions can be a particularly hard sell for commissioners. But too often it is a false economy not to. Understanding the needs of specific communities is critical to improving outcomes, securing value for money and reducing (where appropriate) demands on public services. We need more organisations like Eaves and NAT – to help identify their clients’ needs, to know which pathways of support lead to best outcomes and to inform commissioning decisions about which services are needed and where.

What next?

For sure, the sector could do a better job of mustering its collective evidence about the value of such services. And organisations must individually rethink the way they present their own business cases; wherever possible demonstrating savings they can create by meeting people’s needs effectively.

But we must also tell it like we see it. It is not for want of evidence that these services are being cut. It is the simple, blunt arithmetic of a system in survival mode. Without a more substantive conversation with communities and voluntary sector about the way forward for public services, it is hard to see how some parts of that system and our sector will survive this next round of cuts.

NCVO has already called for a major review of public service markets, to ensure that the government’s vision for public service reform and open public services can be delivered on the ground. There are areas where things are working better and where examples of innovation and excellence could be shared with others. The latest suite of devolution proposals and forthcoming spending round make such a review all the more pressing.

 

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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.

One Response to Charities braced for spending review 2015

  1. Nick Comley says:

    Diversification of income streams and embedding social value in mainstream commercial activities would help VCSE organisations become more self-sustaining. Beacon Centre has opened an Opticians business that seeks to capture just a small percentage of the optometry sector to generate investable surpluses to support people with visual impairment and to prevent avoidable sight loss https://twitter.com/hashtag/socentawardswm?src=hash&ref_src=twsrc%5Etfw
    Must reduce the reliance on donation and contract income and start to compete with commercial organisations profiting from potential social business. Think about what your objectives are and how a commercial business could help you to achieve them, even if it’s tangential.