### **About SCVO**   The Scottish Council for Voluntary Organisations (SCVO) is the national membership organisation for the voluntary sector.   Along with our community of around 4,000 members and supporters, we believe that a thriving voluntary sector should be at the heart of a successful, fair and inclusive Scotland.  **The voluntary sector’s role in public service delivery**  Scotland's voluntary sector is a key partner in the delivery of public services and support across Scotland. Voluntary organisations help strengthen communities, improve wellbeing and provide person-centred services, often complementing and enhancing public sector provision.  The sector's role in public service delivery has grown over time. In 2011, the Christie Commission noted that _"third sector organisations... have, over time, expanded to take on a more active role in delivering services directly."_ Today, around four in ten voluntary organisations receive public sector funding, and in 2023 public bodies invested approximately £3.3 billion in the sector through grants and contracts (SCVO 2025). The Scottish Government's _Public Service Reform Strategy_ further recognises the sector's ability to provide _"the very local, very in-depth and relationship-based support we aspire to"._  ### **About this response** In preparing this response, SCVO has drawn on evidence from our research, policy development and engagement with voluntary organisations across Scotland. Throughout this submission we refer to several published evidence sources which the Committee may wish to consider alongside our response:  **SCVO research and policy**  * Fair Funding in Scotland: [https://scvo.scot/policy/fair-funding-procurement/fair-funding](https://scvo.scot/policy/fair-funding-procurement/fair-funding)   * A Third Sector Partnership for Scotland: A blueprint for a new partnership between the voluntary sector and the Scottish Government: [https://files.scvo.scot/2026/06/ThirdSectorPartnershipPaper\_2026-06-26.pdf](https://files.scvo.scot/2026/06/ThirdSectorPartnershipPaper_2026-06-26.pdf)   * The Scottish Third Sector Tracker: [https://scvo.scot/research/scottish-third-sector-tracker](https://scvo.scot/research/scottish-third-sector-tracker)   * The Scottish Voluntary Sector Workforce Survey 2025: [https://files.scvo.scot/2026/03/ScottishVoluntarySectorWorkforceSurvey\_FullReport\_final.pdf](https://files.scvo.scot/2026/03/ScottishVoluntarySectorWorkforceSurvey_FullReport_final.pdf)   * Public Sector Funding 2025: [https://scvo.scot/research/reports/public-sector-funding](https://scvo.scot/research/reports/public-sector-funding)  * State of the Sector: [https://scvo.scot/research/stats-size](https://scvo.scot/research/stats-size)   * The Voluntary Sector and procurement – a summary of current voluntary sector experiences: https://scvo.scot/research/reports/evidence-library/the-voluntary-sector-and-procurement-a-summary-of-current-voluntary-sector-experiences   * A Third Sector Partnership for Scotland – A blueprint for a new partnership between the voluntary sector and the Scottish Government: [https://files.scvo.scot/2026/06/ThirdSectorPartnershipPaper\_2026-06-26.pdf?\_gl=1\*100d15l\*\_gcl\_au\*NjAzMTY0NTM3LjE3ODM0MjQzMTY.](https://files.scvo.scot/2026/06/ThirdSectorPartnershipPaper_2026-06-26.pdf?_gl=1*100d15l*_gcl_au*NjAzMTY0NTM3LjE3ODM0MjQzMTY)   **Scottish Government research**  * Supporting collaboration between the third and public sectors: A review of current evidence: [https://www.gov.scot/binaries/content/documents/govscot/publications/research-and-analysis/2022/10/supporting-collaboration-between-third-public-sectors-review-current-evidence/documents/supporting-collaboration-between-third-public-sectors-review-current-evidence/supporting-collaboration-between-third-public-sectors-review-current-evidence/govscot%3Adocument/supporting-collaboration-between-third-public-sectors-review-current-evidence.pdf](https://www.gov.scot/binaries/content/documents/govscot/publications/research-and-analysis/2022/10/supporting-collaboration-between-third-public-sectors-review-current-evidence/documents/supporting-collaboration-between-third-public-sectors-review-current-evidence/supporting-collaboration-between-third-public-sectors-review-current-evidence/govscot%3Adocument/supporting-collaboration-between-third-public-sectors-review-current-evidence.pdf)   * Research with Third Sector Organisations and New Businesses — Views and Experiences of Scottish Public Procurement: [https://www.gov.scot/binaries/content/documents/govscot/publications/research-and-analysis/2022/10/research-third-sector-organisations-new-businesses-views-experiences-scottish-public-procurement2/documents/research-third-sector-organisations-new-businesses-views-experiences-scottish-public-procurement/research-third-sector-organisations-new-businesses-views-experiences-scottish-public-procurement/govscot%3Adocument/research-third-sector-organisations-new-businesses-views-experiences-scottish-public-procurement.pdf](https://www.gov.scot/binaries/content/documents/govscot/publications/research-and-analysis/2022/10/research-third-sector-organisations-new-businesses-views-experiences-scottish-public-procurement2/documents/research-third-sector-organisations-new-businesses-views-experiences-scottish-public-procurement/research-third-sector-organisations-new-businesses-views-experiences-scottish-public-procurement/govscot%3Adocument/research-third-sector-organisations-new-businesses-views-experiences-scottish-public-procurement.pdf)   **Examples of voluntary sector preventative approaches**   * Cyrenians Hospital InReach Evaluation Summary: [https://cyrenians.scot/assets/000/000/869/Hospital\_In\_Reach\_Evaluation\_Summary\_%282%29\_original.pdf](https://cyrenians.scot/assets/000/000/869/Hospital_In_Reach_Evaluation_Summary_%282%29_original.pdf)   * Place2Be: Statistics and evidence: [https://www.place2be.org.uk/about-us/impact-and-evidence/statistics-and-evidence/](https://www.place2be.org.uk/about-us/impact-and-evidence/statistics-and-evidence/)   * York Health Economics Consortium: Economic Evaluation of CHAS Hospice Services:  [https://www.chas.org.uk/media/4zlf4fbw/yhec-final-report\_-chas-economic-evaluation.pdf](https://www.chas.org.uk/media/4zlf4fbw/yhec-final-report_-chas-economic-evaluation.pdf)   SCVO has chosen to focus its response on those questions where we can draw on evidence from our research, policy work and engagement with voluntary organisations across Scotland, alongside relevant external evidence. We have not responded to questions where we do not consider ourselves best placed to comment.  1. **The Scottish Government aims to deliver on average £0.5 billion in savings through efficiencies per year for the next three years (2026-27 to 2028-29):** * **To what extent are these savings achievable, and how will they shape public service delivery?**   This text box has been deliberately left blank.  * **What progress is being made towards achieving these efficiencies?**   This text box has been deliberately left blank.  * **What are the barriers to achieving greater efficiency and how can these be addressed?**    Efficiency should not be understood solely as reducing expenditure or cutting services. Public service reform can and should also focus on addressing the inefficiencies created by the existing funding landscape, complex commissioning and procurement processes, and barriers to effective partnership working. For voluntary organisations, these issues can divert significant time and resources away from supporting the people and communities they exist to serve.  Addressing these barriers must be a priority for public service reform. This includes reforming funding practice in line with SCVO's Fair Funding principles, embedding ethical commissioning approaches across the public sector, supporting more effective partnership working between public bodies and voluntary organisations, and creating the conditions for greater investment in preventative interventions. SCVO expands on each of these issues in later sections of this response.  2. **How should the Scottish Government best present the extent of any realised efficiencies in the annual budget publication, including providing clarity on whether these are expected to be recurring savings?**   This text box has been deliberately left blank.  3\. **The Fiscal Sustainability Delivery Plan aims to achieve an average reduction of the public sector workforce of 0.5% per year over five years.**  * **To what extent is this target achievable and how will it shape public service delivery?**  This text box has been deliberately left blank.  * **What progress is being made towards achieving this target?**   This text box has been deliberately left blank.  4. **What actions can the Scottish Government take to ensure these workforce reductions are delivered in a managed way which best supports effective government and public service delivery?**  This text box has been deliberately left blank.  5. **The PSR strategy states that it will protect frontline services. To what extent is there sufficient clarity about how frontline roles are defined and how efficiencies in back-office functions can be delivered in a way that minimises impact on the delivery of public services?**   SCVO welcomes the Public Service Reform Strategy's commitment to protecting frontline services. However, greater clarity is needed regarding how frontline services are defined in practice. There should be greater recognition of the frontline role played by voluntary organisations in delivering public services and supporting communities across Scotland. Staff working in third sector organisations delivering public services are frontline workers.  Significant barriers stand in the way of the voluntary sector realising its full potential in delivering for people and communities across Scotland. These must be addressed by the Public Service Reform process.   **Barriers facing Scotland’s voluntary sector**  The Scottish Government’s Public Service Reform Strategy itself identifies “short term static funding” and limitations in procurement as “real challenges”. The Strategy also recognises that voluntary organisations can feel disconnected from how services are designed and delivered, and are regarded solely as providers despite their knowledge, experience and significant ability to contribute to service design and improvement.  SCVO's research and engagement with the sector consistently highlight unstable funding, overly bureaucratic funding and procurement processes, weak relationships with public sector partners, and insufficient involvement of voluntary organisations in the planning, design and delivery of services. These findings are reflected in Scottish Government research, which identified funding, procurement, meaningful collaboration and trust as key barriers to effective collaboration between the voluntary and public sectors.  The impact of these barriers is not abstract. Existing public sector commissioning and funding practices make it harder for voluntary organisations to recruit, retain and support the workforce delivering services and support in communities across Scotland. The Scottish Voluntary Sector Workforce Survey highlights the consequences this can have for workforce stability and sustainability across the sector.  The impact of these barriers is not abstract. Existing public sector  commissioning and  funding practices make it harder for voluntary organisations to recruit, retain and support  the workforce delivering vital services  and support in communities across Scotland. The  Scottish  Voluntary Sector Workforce Survey highlights how funding arrangements  that are short term, uncertain, or fail to reflect the full cost of delivery can undermine  workforce stability and sustainability. Organisations can struggle to offer secure  employment, competitive pay, and conditions that are comparable with those available in  other sectors, making it more difficult to attract and retain skilled and experienced staff.  These challenges also have a direct impact on voluntary sector staff and particularly lower paid frontline workers. The Scottish Voluntary Sector Workforce Survey highlights how low pay, insecure employment, and limited opportunities for longer-term learning and development can contribute to stress, uncertainty, and reduced wellbeing among staff.   SCVO fully supports the principles of Fair Work. Current funding and commissioning practice, however, is too often at odds with the delivery of those principles. The "short term static funding" identified in the Scottish Government's Public Service Reform Strategy can make it more difficult for organisations to provide long-term secure employment, continue investing in staff development, and improve pay and conditions. Fair Funding is therefore essential if employers are to deliver Fair Work principles to the fullest extent. This includes funding that covers the full costs of employing staff and supports progress towards greater parity between voluntary sector and public sector workers delivering comparable services.  Protecting frontline services should therefore include addressing the factors that make it harder for voluntary organisations to attract, retain and support the staff delivering those services. SCVO sets out a number of measures elsewhere in this response which would help address those barriers, including action on Fair Funding, mainstreaming ethical commissioning approaches throughout the public sector, and strengthening partnership working between the voluntary and public sectors. Doing so would strengthen frontline service delivery and help unlock the sector's full contribution to Scotland's public service ambitions.  6. **Beyond the financial benefits that the Public Sector Reform (PSR) Strategy aims to achieve, what are the key outcomes that reform should be aiming for?**   Public service reform must prioritise improving outcomes for people and communities. This must include strengthening prevention and early intervention, creating public services that are responsive to the needs and experiences of the people who use them, and ensuring that voluntary organisations are treated as equal partners in the planning, design and delivery of services.  **Partnership in planning, design and delivery**  Ensuring services are responsive to the needs of the people who use them means they must be shaped by the people and communities who use them and informed by the expertise of those delivering them. Voluntary organisations bring specialist knowledge and direct experience of supporting people and communities. Successful reform should therefore result in services being planned, designed and delivered through genuine partnership between public bodies, voluntary organisations, and the people and communities they serve.  This partnership approach should also be reflected in the way services are commissioned. The Public Service Reform Strategy identifies limitations in procurement as a challenge facing the voluntary sector. Too often, public bodies default to procurement, creating rigid, complex processes that are disproportionately bureaucratic. This can exclude smaller, specialist organisations, with insufficient emphasis on quality, impact, and community need. This means communities lose out on the ingenuity, experience, and reach of voluntary organisations. Public service reform should therefore support ethical commissioning approaches that prioritise outcomes, community need, collaboration and long-term value, while avoiding unnecessarily complex or burdensome processes.  The Scottish Government's Public Service Reform Strategy recognises that "the third sector and wider economy include essential providers, colleagues, partners, and in many cases deliver exactly the very local, very in-depth and relationship-based support we aspire to". A key outcome of reform should be realising that aspiration by ensuring a genuine partnership of equals between public bodies and voluntary organisations, enabling them to make their fullest possible contribution to improving outcomes for people and communities across Scotland. SCVO welcomes the Scottish Government's commitment to establishing a new partnership with the voluntary sector. In our paper, _A Third Sector Partnership for Scotland_, SCVO sets out its vision for a new statutory partnership between the voluntary sector and public bodies, helping to ensure that commitments to collaboration are implemented consistently and accountably across government.  **Preventative, community-based approaches**  There is also strong evidence that preventative, community-based approaches can improve outcomes while reducing future demand on public services. The voluntary sector plays an essential role in delivering innovative and preventative approaches. An independent evaluation of Cyrenians' Hospital InReach service found that it reduced hospital readmission rates by more than two-thirds. Analyses of services delivered by Place2Be and CHAS have similarly demonstrated significant social and economic value arising from earlier intervention and support. Public service reform should therefore create the conditions that enable voluntary organisations to continue developing and delivering preventative approaches that improve outcomes for people and communities.   7. **The PSR Strategy includes 18 different workstreams which aim to remove barriers to reform.**  **One workstream focuses on “simplification”, recognising that “complexity of processes, structures and reporting requirements is a key barrier to effective and efficient service delivery”.**   **“Prevention” is one of three pillars providing structure to the Strategy.**  * **What should the Scottish Government’s priorities be under its simplification workstream and what level of savings can be achieved through this approach?**   Simplification should focus on addressing the processes and systems that currently make service delivery more difficult than it needs to be.  **Existing barriers**   SCVO's research and engagement with the voluntary sector have consistently highlighted the challenges created by short term funding, unsustainable arrangements, overly bureaucratic funding and reporting requirements, inconsistent approaches across public bodies, bureaucratic procurement and commissioning processes that can be exclusionary to voluntary organisations, as well as barriers to effective partnership working. These issues create unnecessary obstacles for both public bodies and voluntary organisations, diverting time and resources away from supporting people and communities.    The Scottish Government's own research on collaboration between the voluntary and public sectors identified funding, procurement, meaningful collaboration and trust as key barriers to effective partnership working. Successful reform must address these barriers.  **Enablers**   SCVO would welcome action to reform the public sector funding landscape for the voluntary sector – in line with our Fair Funding principles, creating a funding environment that is fair, flexible, sustainable, accessible and transparent. We also support the Scottish Government's commitment to establishing a new partnership with the voluntary sector. SCVO has set out its vision for such a partnership in A Third Sector Partnership for Scotland.  **Evidence-base**  SCVO is not aware of any robust evidence quantifying the level of financial savings that could be achieved through simplification. However, there is substantial evidence of the inefficiencies, administrative burdens and barriers that currently exist across funding, procurement, commissioning and partnership working – some of which is outlined in the evidence cited in the development of this response. Simplification should therefore focus on addressing these longstanding challenges and creating the conditions for improved service delivery and better outcomes for people and communities across Scotland. This is, ultimately, how the success of public service reform should be judged.  * **What progress has been made to date with preventative budgeting?**  Despite many years of discussion about the importance of prevention, it is difficult to point to evidence of systemic progress towards preventative budgeting.   Transparent funding would enable voluntary organisations, civil servants, scrutiny bodies, and others to better understand Scottish Government decisions, funding flows, and budget changes, and to engage with government on their potential impacts on voluntary organisations, their staff and volunteers, and the communities they support. Transparent funding data is also essential to assessing progress towards the Scottish Government's commitments to fairer funding for the voluntary sector by 2026.  SCVO welcomes efforts to improve the transparency of funding information, including through the Preventative Budgeting Tool. However, further work is needed to collect funding information across all government departments and produce a breakdown of Scottish Government funding to the voluntary, public and private sectors by department and budget line.  * **How should the forthcoming Budget support greater progress towards preventative budgeting across the devolved public sector? Please set out any barriers and how these can be addressed.**  **Fair Funding**  SCVO welcomes the emphasis placed on prevention within the Public Service Reform Strategy. The voluntary sector plays an important role in delivering preventative, community-based support. However, short-term and unsustainable funding arrangements, funding uncertainty, overly bureaucratic processes, and barriers to effective partnership working can make it more difficult for organisations to plan, invest, respond flexibly to the needs of the people and communities they support, and develop new approaches to improving outcomes. That's why SCVO is calling on the Scottish Government and the wider public sector to apply Fair Funding principles to all grants and contracts. This includes multi-year funding commitments, sustainable funding, and proportionate approaches to application, reporting and monitoring requirements, enabling voluntary organisations to focus on delivering long-term outcomes for people and communities.  **Trust & partnership**  Looking beyond the Budget itself, greater progress towards preventative budgeting will also require changes in the way public bodies work with delivery partners, including voluntary organisations, in practice. Highly prescriptive and risk-averse approaches to funding and commissioning can make this more difficult. Greater progress towards preventative budgeting will require organisations to be trusted to take a long-term view, test new approaches, learn from experience, and adapt in response to changing needs and circumstances.  The forthcoming Budget should play its part in creating the conditions for prevention to flourish. This includes supporting longer-term planning, reducing unnecessary bureaucracy, and enabling public bodies and voluntary organisations to work together in pursuit of shared outcomes for people and communities. It should also support funding and commissioning approaches that enable organisations to focus on delivering long-term outcomes rather than responding to the many challenges presented by the public sector funding environment that voluntary organisations have to contend with.  4. **What changes to the Scottish Government's approach to budget-setting are needed to effectively deliver public service reform?**   **Fair Funding**  Effective public service reform requires a budget-setting approach that supports long-term planning, prevention and partnership working. The Public Service Reform Strategy itself recognises that “short term static funding” presents “real challenges”. Indeed, the existing funding environment makes it more difficult for organisations to plan, invest, retain staff, and ultimately deliver for people and communities in Scotland. The Scottish Government should therefore reform its approach to budget-setting and funding in line with SCVO's Fair Funding principles: funding that is fair, flexible, sustainable, accessible and transparent. In practice, this means applying Fair Funding principles to all grants and contracts, including multi-year funding commitments, sustainable funding, and proportionate approaches to application, reporting and monitoring requirements. This would provide greater certainty for organisations, support long-term planning and workforce stability, and enable more time and resources to be focused on delivering outcomes for people and communities.  Delivering on these principles would help to create the conditions for voluntary organisations to make their fullest possible contribution to improving outcomes for people and communities.   **Transparency**  SCVO has long called for improvements to funding transparency in the budget setting process.   As set out elsewhere in this response, voluntary organisations play a significant role in delivering public services and supporting communities across Scotland. However, there remains limited visibility of how funding flows across sectors and contributes to outcomes for people and communities.   Greater transparency would provide a clearer understanding of the role that voluntary organisations play in the delivery of public services across Scotland, the level of public investment supporting that delivery, and the contribution the sector makes to improving outcomes for people and communities. This would support more informed decision-making on public service reform, and the ongoing delivery of services.  There are a series of improvements the Scottish Government could make to transparency of budget setting. These include: -  * Collecting funding information across all government departments and producing a breakdown of Scottish Government funding to voluntary, public and private sectors by department and budget line  * Publishing the Scottish Government’s total direct investment in voluntary sector organisations annually from grants and contracts, with detail on the proportion that delivers on Fair Funding Principles.  * Adopting and publishing awards to the voluntary sector to the 360 Giving Data Standard, including basic identifier core fields such as recipient name, organisation, and charity number.   * Including all spending in the Scottish Government’s monthly reports and improving categories to ensure data is useful and accessible.  8. **The Scottish Government included an upfront Invest to Save Fund of around £30 million in the 2025-26 and 2026-27 Scottish Budgets for reform projects that will deliver ongoing savings and support the delivery of the PSR strategy.**    * **To what extent is the Invest to Save Fund delivering projects that achieve ongoing savings?**    SCVO is not aware of publicly available evidence that would allow us to assess the extent to which the Fund is delivering ongoing savings. Greater transparency around funded projects, evaluation findings and realised savings would support scrutiny of the Fund’s impact.   * **How are successful outcomes from this Fund being shared more widely across the public sector?**   SCVO is not aware of publicly available evidence that would allow us to assess how successful outcomes from the Fund are being shared across the public sector. Greater transparency would support scrutiny and wider learning across the public and voluntary sectors. --- ## About SCVO SCVO (Scottish Council for Voluntary Organisations) is the national membership organisation for Scotland's voluntary sector. Our role is to champion the role of voluntary organisations in Scotland and to support them to do work that has a positive impact. SCVO supports members and the wider voluntary sector with all aspects of setting up and running a voluntary organisation. SCVO represents the needs and concerns of the voluntary sector to the Scottish government in Holyrood and UK government and Westminster. Through our learning and events programme SCVO offers training and development opportunities to the sector. Members access an extensive membership benefits package including specialist, in-depth, 1-to-1 guidance from our Information Services team and from professional service partners. Access to exclusive membership networks (including comms, employers, governance and policy) supports members to grow their connections, stay up to date, exchange ideas and views with peers, and learn through tailored, learning opportunities. SCVO members enjoy free access to Funding Scotland Premium to stay on top of funding opportunities to support their organisation’s financial resilience. Discounts and savings savings on SCVO products and services (including our HR service, managed IT support, payroll service and events and training) and partner offers provide members with support to allow them to focus on delivering their organisation’s goals. Further SCVO products and services include [extensive digital support](https://scvo.scot/support/digital), a climate action resource [Growing Climate Confidence](https://climateconfident.scot), a voluntary sector publication [Third Force News](https://tfn.scot) and a voluntary sector jobs and recruitment service [Goodmoves](https://goodmoves.org). For more information on SCVO membership, visit [SCVO membership](https://scvo.scot/membership)