Letter to the Deputy First Minister of Scotland and the Cabinet Secretary for Economy and Gaelic: Investing in Communities Fund

This letter was sent to Kate Forbes MSP, Deputy First Minister on the 26^th of January 2026 from Anna Fowlie, Chief Executive, SCVO, Lesley Kelly, TSI Scotland Network, Louise Goodlad, Third Sector Employability Forum (TSEF) and Euan Leitch, Chief Executive, SURF.

Dear Deputy First Minister

Investing in Communities Fund

On behalf of the TSI Network, the Third Sector Employability Forum (TSEF), the Scottish Council for Voluntary Organisations (SCVO) and recipients of the Investing in Communities Fund (ICF), we are writing to raise our concerns about the Investing in Communities Fund following the recent Scottish Budget.

As you know, the Investing in Communities Fund (ICF) is a multi-year fund, now in its third year. It could have been a good case study for the many benefits of multi-year funding. For several months, however, organisations from across the voluntary sector have struggled to understand the future of the fund, seeking clarity from the government, including a letter from SCVO, the TSI Network, and Third Sector Employability Forum (TSEF) on 17 December ahead of the Scottish Budget. Other than a standard acknowledgement, we are yet to receive a reply to that letter.

The Scottish Government Ministers and officials are well aware of the importance of making and communicating funding decisions to third sector organisations as soon as possible to allow voluntary organisations and staff to plan their work. Indeed, the government has committed to timely communications and payments for voluntary sector organisations as part of their Fairer Funding commitments. At a minimum civil servants ought to have been preparing recipients in advance if it looks likely funding won’t continue. Despite this, there was no communication with recipients of ICF funding, and over a week on from the Scottish Budget there has still been no contact on the future of the fund. It is clear from underlying budget papers that ICF has been removed from the Regeneration budget, but one needs to dig deep to find that.

We are deeply concerned about the lack of communications about the ICF, particularly for organisations in receipt of funding and the quarter of a million people they support.

Recipients of the fund now find themselves facing the worst-case scenario, they are just a few weeks away from the end of the current funding cycle but have received no communications on the future of the fund. This leaves organisations, their staff and volunteers to speculate about the future of the important services that they provide people and communities, and unsure of their own future. This not only contradicts the Scottish Government’s Fairer Funding and Fair Work commitments, but is frankly deeply unfair to voluntary organisations, staff, and volunteers who through their work enable Scottish Government to realise its ambitions.

Scottish Government well understands that community-based projects rely on this funding to deliver essential services and pay their staff. Hundreds of hard-working people will now be made redundant, and because of the lack of communication from Scottish Government their employers are unable to meet the statutory timescales and therefore will be left with costs they will need to find from scant reserves.

The Scottish Government must do better.

On 24 September 2025, in response to a parliamentary question about the ICF, the Cabinet Secretary for Finance said “All organisations that receive funding from the ICF are aware that it is a three-year fund and have been asked to consider how their projects will be sustained after the ICF funding period ends on 31 March 2026, but those will be active discussions.”  This tells a different story to the experience of recipients on the ground – there have been no discussions.

As a matter of urgency, Scottish Government must communicate clearly with funded organisations, including acknowledging that they have not behaved well in this process.  If, as seems likely, there is no possibility of extending or replacing this fund, you should also commit to short-term transitional funding to allow for a humane ending for the workers, volunteers and most importantly the people who have been supported in communities across Scotland.

We are extremely disappointed that something which could have been an exemplar of good practice has turned into a case study of how not to do multi-year funding.

We welcome the opportunity to discuss this further.

Yours sincerely

Anna Fowlie, SCVO

Lesley Kelly, TSI Scotland Network

Louise Goodlad, Third Sector Employability Forum

Euan Leitch, SURF