To save time, most important Huckfield comments below are highlighted in this colour.

Background – Charities and Voluntary Sector will lose £3bn by 2015/2016

As probably the best up to date summary of the effects of public spending cuts on Charities and the Voluntary Sector, NCVO publishes the NCVO UK Civil Society Almanac. The current version forecasts the scale of looming cuts:

“The formation of the coalition between the Conservatives and Liberal Democrats in May 2010 produced a deficit reduction plan with an ambitious target (the “structural” deficit eliminated by 2015) and a reliance on spending cuts to achieve this. Public expenditure is forecast to fall by roughly £30 billion in real terms between 2009/10 and 2015/16, a fall of 4%.

“Local government spending is estimated to fall by 11.4% between 2010/11 and 2015/16. If these cuts are passed on to local charities this would suggest a fall in local government income to charities of around £800 million per year by the end of the period. The equivalent figures for central government suggest a fall of around £450 million.

“The UK voluntary sector is therefore estimated to lose around £1.2 billion in public funding a year by 2015/16, a fall of 9.4%. Cumulatively, the sector stands to lose £3.3 billion over the spending review period (2010/11-2015/16). All these figures depend on voluntary sector income from government falling at the same rate as total government spending”.

Sir Peter Housden’s Memo – Even Worse to Come

Sir Peter Housden has been Permanent Secretary of the Scottish Government since July 2010. He was previously Permanent Secretary of the Department for Communities and Local Government.

On Thursday 30 August 2012, the Guardian published its own summary of the now-famous “leaked Housden memo“, warning of at least £10bn more cuts to come:

“The timetable for the next round of spending cuts was highlighted in an internal memo by Sir Peter Housden, permanent secretary for the devolved Scottish government in Edinburgh, who warned staff of a “sobering” assessment from the Treasury at a meeting in London in May.

“Housden said of the meeting at the Foreign Office, which was addressed by William Hague and Danny Alexander and senior officials from the Treasury and Department of Work and Pensions:“They reminded us that the UK strategy for fiscal consolidation implies that the next spending review (due next year, it is thought) will involve a reduction in spending of the same order as in the current programme, and further substantial reductions in welfare spending, beyond those currently in the pipeline”.

Cuts will Affect Local Spending too

Just in case any readers reckon that most of this represents cuts at national level, on Monday 03 September 2012, Centre for Cities published: “Pound Land: What might austerity look like over the next few years?”:

“Last week, the leaked Housden Memo said the Chancellor is drawing up plans to announce a further £10 billion reduction in welfare cuts. The memo points out the next spending review—set for 2013, though still up for debate—will need to see welfare reduced by £10 billion through 2016, otherwise other areas such as education will need to be cut further.

“Whether the cuts amount to £10 billion in the end is less important than the notion that additional cuts are in the pipeline. Some of these cuts will affect national welfare spending (such as JSA), but it will affect local government spending as well.

“…..In sum, local government’s spending power has fallen almost 9% since the 2010/11 Spending Review. The Housden Memo suggests further cuts could be equivalent to 20% reductions from 2012/13 budgets”.

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Funding from Trusts and Foundations

Many Charities and Third Sector organisations are now seriously beginning to think about approaching Trusts and Foundations for funding. There are nearly 9000 of them which donate to a wide range of charitable causes. Most are not service deliverers and many are sophisticated in the way they handle funding approaches.

It is interesting that their total annual donations amount to around £3bn annually – roughly the same amount as Charities and Voluntary Sector organisations may lose before 2015/2016. But since this annual £3bn already contributes to these organisations, it’s by no means a simple replacement funding process!

The following are gentle Huckfield reminders about new approaches to Trusts and Foundations:

  • Each Trust or Foundation is very different. They may be family, company, community, private or charities set up by London Livery Companies. Though their sites usually state their application process and timetable, many have exclusions.
  • Few are as wide in their coverage as the public sector funding sources with which many readers may be more familiar.
  • So it’s not a good idea simply to “cut and paste” over a wide range of Trusts and Foundations. Considerable research is needed beforehand to establish the purpose, areas covered and other comments. A Trust usually needs to see the accounts and constitutional details from organisations which is might fund.
  • If you reckon that making a funding application to public sector bodies and organisations is sometimes difficult, take a deep breath. Funding approaches and applications to Trusts and Foundations need some really detailed research first and big reserves of strength and determination.

Huckfield will soon be publishing more on approaches to Trusts and Foundations and other approaches which Charities and Third Sector Organisations might make.

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