From the TUC

How much more can the voluntary sector take?

24 Nov 2011, by in Public services

The politics of positioning is always a tricky game.  And so it is proving for many within the voluntary sector.  As austerity bites and the sector finds itself competing for scarce resources, it is understandable that many charity and voluntary sector leaders find themselves boxing clever with a government that has explicitly courted them with Big Society talk, public service commissioning opportunities and some useful budget tinkering on Gift Aid.

However, it remains to be seen how tenable these positions remain in the face of a deepening crisis across the sector.  It seems that every week brings worsening prospects for jobs, funding and services. 

While this clearly makes a mockery of the government’s Big Society aspirations, it might be argued that voices of opposition in the sector have been muted.  But is this soon to change?

Anger is clearly growing and not without reason.  Not only are voluntary organisations facing huge cuts and loss of jobs and services but, as we’ve blogged before, the promised opportunities are failing to materialise as private enterprise looks to dominate the open public services market.

Just how bad are things in the sector?  A quick trawl through reports in the last few months gives you a good idea.

The NCVO’s Charity Forecast shows that charity leaders’ confidence is lower than ever.  As NCVO’s report says:

98 per cent of charity leaders expect economic conditions within the sector to be negative over the next 12 months. This is the bleakest outlook in the survey’s three year history, with confidence levels lower than they were at the height of the recession.

Evidence from the Labour Force Survey shows that employment in the sector has fallen by 5% in the previous 12 months.  In addition, part time working is on the increase and average earnings have fallen to just over £10 an hour.  NCVO and Third Sector Research Centre report that employment is down over two successive quarters following the flatline towards the end of 2010.

An example of the impact on the workforce can be seen at Quarriers, the Scottish social care charity.  All 2,000 workers there are facing pay cuts, around a quarter of them losing at least 10% of their take home. On top of that are reductions in sick pay, maternity pay, paternity and adoption pay, increased pension contributions and an end to automatic pay increases in future.  This is not an isolated case.

Funding is nose-diving.  London Councils, for example, plans to cut voluntary sector funding by 75% from 2013.  Funding to the sector will reduce from £26m in 2010/11 to £8m in 2013/14.

Services are clearly at risk.  A report by the Charity Finance Directors Group and accountants PKF shows a picture of uncertainty and confusion over government policy with charities facing significant funding shortfalls and difficulty in planning and delivering services.  Richard Weighell of PKF says in Third Sector that:

there is a fundamental imbalance between supply and demand in the not-for-profit sector; charities are seeing growing demand for their services but are unable to invest enough to provide these services effectively

This is borne out by a poll of 120 organisations in the North East by Vonne that found that a quarter were expecting to close in the next 12 months and almost half were likely to shed at least one service.  73% had seen funding decrease in the previous year, 64% are using reserves.  Yet over two thirds had experienced a rising demand for their services.  And a London Voluntary Service Council survey showed, 70% of voluntary organisations reported an increase in demand for their services but 75% were not confident in meeting that demand now or in the future.

No wonder then that rumblings from within the sector are growing.  Will 2012 be the year when the sector begins to fight back? Feedback from trade union colleagues at voluntary sector events suggests so.  Building effective links between us will be essential if a serious challenge is to be made.

Unions, charities and voluntary groups have worked well on individual campaigns such as The Hardest Hit  and Justice for All.  And there have been some interesting developments on a regional level, interesting discussions have been taking place between the TUC and voluntary sector partners in the North West for example. It will be interesting to see how things progress but my prediction is that trade union and voluntary sector relationships are bound to develop as next year’s cuts bite even deeper.

I came across a blog from Gibb’s Barrow who had this to say on the politics of positioning in relation to product development:

Some people believe that the best way to produce a successful product is to align it with power and influence … while this might be an effective short term strategy, it is often the very reason why products fail to meet customer needs, why infighting occurs within organizations, and why product plans fall short of their goals.

The parallels are clear.  It is time for voluntary sector leaders to re-assess their strategy with a focus on what they are for and who makes up their constituency.  There’s a long game here with very high stakes, short term damage to the sector and those communities that rely on it could take years to repair.  The noises I’m hearing suggest that a re-alignment may be underway.

The Big Society seems increasingly conspicuous by its absence in government circles.  It might be about to make itself heard once again.