Scottish Budget 2019/20

SCVO Briefing to Scottish Parliament

21 January 2019

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Summary

• Reduced funding is resulting in high levels of uncertainty for the people and communities who rely on personalised services delivered by Scotland’s third sector and the staff and organisations who work to support them. Organisations delivering key services are already struggling to continue their work whilst maintaining the quality of what they deliver.

• Any real terms fall in revenue grant allocation or standstill budgets for Local Authorities will have a knock-on effect for Scotland’s third sector, putting the delivery of crucial services and strong community connections at risk at a time when our organisations are relied upon to deliver more for less.

• The funding situation for the sector cannot continue as at present. The sector needs a sustainable funding model to maintain and build capacity to deliver quality services and retain skills within our organisations to meet growing demand.

• Those outside of government must be presented with an unambiguous account of the budgetary decisions made and be involved in the decision-making process. The latest Scottish Budget reveals the need for greater transparency through the delivery of a fiscal framework for third sector and local government funding.

• The debate surrounding the allocation of funding to Local Authorities in the 2019/20 Scottish Budget reveals the deeper issue that there is no shared, clear vision and method for how we achieve our National Outcomes as a collective through the support of the Scottish Budget.

Our position

The current debate and lack of clarity surrounding the Scottish Budget for 2019/20 and the allocation of funding for Local Authorities is of concern to much of Scotland’s third sector. In 2017, only 4% of SCVO members thought that their public sector funding would increase, and local authority cuts were the top concern for most respondents. Although the resilience of Scotland’s third sector has seen it navigate through a decade of cuts and streamlining, any real terms fall – even standstill – in Local Authority budgets in 2019/20 would put the delivery of crucial services in communities at risk. Based on the SPICe analysis of the Scottish Budget for 2019/20, Local Authorities would see a 3.4% real terms fall in their revenue grant allocation under the proposed budget.

In its evidence session with COSLA and the Scottish Government, Members of the Local Government and Communities Committee heard from COSLA that funding for the third sector, which ‘delivers a massive amount of valuable support to our communities,’ would be an area at risk of cuts. With the commitment to increasing public sector pay and taking inflation into account, as well as the ring fencing of protected areas, it is logical to presume that services delivered by Scotland’s third sector will be put at risk with Local Authorities already announcing the substantial cuts they may have to make. The fact that we can only make presumptions about the viability of crucial third sector services in the short-term is an illustration of why the current system needs to change.   

The issue for Scotland’s third sector and the people and communities we work alongside goes far deeper than any reduction in Local Authority funding in the 2019/20 Scottish Budget and the cuts to third sector services that may subsequently arise. Only 56% of grant recipients, and 50% of contract/service level agreement recipients felt that their funding was enough to cover core costs for the activity associated with the funding and contract in 2016/17. Much of the sector is already struggling to continue its work in the current context whilst maintaining the quality of what it delivers.

The sustainability of the third sector is not an end, it is a means of ensuring that those marginalised by the current economic system are not left behind; that organisations at the heart of communities and with the skills, knowledge and experience to make a real difference can pilot, test and implement much needed change and methods of prevention within the Scottish economy. The patience required to work in a way that can deliver much more impact and social good means that the unpredictability of current short-term funding arrangements is a major problem for Scotland’s third sector. Current arrangements fail to recognise the need for long-term projects or planning, resulting in regular stress for organisations, communities and individuals.

Current funding arrangements have a significant impact on the third sector workforce and limit the sector’s impact at a time when the Scottish Government, local government, the justice system and the NHS rely on our organisations to deliver more. The sector needs longer-term funding to maintain and build capacity to deliver quality services and retain skills within our organisations. The different messages coming from local and national government present a real challenge for the third sector and the people and communities we work alongside. Plans for new funding models for Scotland’s third sector must be progressed and SCVO is working with the Scottish Government to develop options to enable this to happen.

A different approach to funding Scotland’s vital services must be part of a collective discussion as to how Scottish Budgets can give greater opportunities to and increase the wellbeing of the people living in Scotland. This discussion cannot happen without the acceptance of an open government approach to developing the Scottish Budget, which allows wider society to participate in the decision-making process and enables funded organisations to understand the bigger picture.

Later this month, Scotland will launch its second Open Government National Action Plan, setting out the commitments the Scottish Government has pledged to deliver as a pioneer of open government to improve the lives of people living in Scotland. Greater financial transparency is one of those commitments. In our view, the latest Scottish Budget and the lack of clarity surrounding the allocation of funding for Local Authorities in 2019/20 shows the need for greater financial transparency and less ambiguity around the impact that budgetary decisions will have on communities across Scotland, including the third sector.

We are pleased that Members of the Local Government and Communities Committee approached the issue of budget clarity in their recent evidence session with COSLA and the Scottish Government. In our view, the ongoing debate highlights the need and opportunity to seriously explore the practice of open budgeting when it comes to developing a fiscal framework for third sector and local government funding; this would allow those outside of government to cut through what many could consider a confusing debate between local and national government and help build greater confidence and trust at a time when citizens, and indeed our sector, are unsure who and what to believe.

Further, without some sort of alignment to the National Performance Framework, it is impossible to see how Scotland is allocating its budget to achieve the National Outcomes. The fact that vital third sector services continue to be subjected to pick and mix cuts and underfunding by Local Authorities shows that there is no clear direction of travel for how we achieve our National Outcomes as a collective through the support of the Scottish Budget. Is the current approach really giving greater opportunities to and increasing the wellbeing of the people living in Scotland whilst leaving no-one behind?

Conclusion

Scotland’s third sector has a well-established reputation for delivering high quality personalised services and working alongside some of the most vulnerable groups across society to improve their lives. However, organisations delivering key services are already struggling to continue their work whilst maintaining the quality of what they deliver. Any real terms fall in revenue grant allocation or standstill budgets for Local Authorities will have a knock-on effect for Scotland’s third sector, increasingly putting the delivery of crucial services at risk.

Uncertainty around the current short-term funding arrangements and the possibility of pick and mix cuts to the services our members deliver will always have a significant impact on people and communities across Scotland. Alignment of spending decisions with the National Performance Framework and greater transparency in how these decisions are made is key if Scotland is to achieve our National Outcomes and leave no-one behind.

About us

The Scottish Council for Voluntary Organisations (SCVO) is the national body representing the third sector.There are over 45,000 voluntary organisations in Scotland involving around 138,000 paid staff and approximately 1.3 million volunteers. The sector manages an income of £5.3 billion.

SCVO works in partnership with the third sector in Scotland to advance our shared values and interests. We have over 2,000 members who range from individuals and grassroots groups, to Scotland-wide organisations and intermediary bodies.

As the only inclusive representative umbrella organisation for the sector SCVO:

• has the largest Scotland-wide membership from the sector – our 1,900 members include charities, community groups, social enterprises and voluntary organisations of all shapes and sizes
• our governance and membership structures are democratic and accountable - with an elected board and policy committee from the sector, we are managed by the sector, for the sector
• brings together organisations and networks connecting across the whole of Scotland
• SCVO works to support people to take voluntary action to help themselves and others, and to bring about social change.
• Further details about SCVO can be found at www.scvo.scot.

Contact

Paul Bradley

Scottish Council for Voluntary Organisations,

Mansfield Traquair Centre,

15 Mansfield Place, Edinburgh EH3 6BB

Email: politicalengagement@scvo.scot

Tel: 0131 474 8000