Budget delays and impact on the voluntary sector

When the Scottish Government announced in November 2019 that the budget would be postponed, due to the general election, SCVO recognised that the delay would impact on funding decisions for the voluntary sector. The delay and uncertainty will likely cause significant challenges for organisations who receive annual funding from the Government, local authorities and other public bodies.

Without confirmed funding for the next financial year, we know some organisations will have to consider issuing redundancy notices to staff, impacting both on staff wellbeing and continuity of services to beneficiaries. We have therefore been engaging with the Scottish Government and COSLA to seek assurance that steps will be taken to minimise the uncertainty and provide adequate notice on funding decisions.

Before Christmas, we wrote to Aileen Campbell, Cabinet Secretary for Communities and Local Government, to highlight the knock-on effects of delays in the Scottish budget and she responded yesterday (7^th January).

In her response, she has agreed to issue grants worth £3.38 million to a range of third sector organisations for quarter one of next financial year to mitigate the risks of the budget delay. This commitment covers organisations funded through her own portfolio. However, she has highlighted the issue to Cabinet colleagues and asked them to consider similar arrangements for other departments.

We have also raised the issue with civil servants and are aware that some other Scottish Government departments have already made similar arrangements. For example, a decision has been made to extend the grants provided through Children, Young People and Families Early Intervention & Adult Learning and Empowering Communities Fund from the 1st April to the end June 2020.

We are continuing to take action to seek assurances from a wider range of Government departments and public bodies. Yesterday we wrote to Derek Mackay (Cabinet Secretary for Finance, Economy and Fair Work) and Alison Evison (COSLA President) to seek additional commitment to ensuring that the negative impact of the budget delay on voluntary organisations is minimised.

Reducing the uncertainly, wherever possible, is one of SCVO’s top priorities over the coming weeks and months. We would be keen to hear your experiences of the impact of the budget delay and would be grateful if you could get in touch and share your experience – both positive (e.g. where extensions have been offered) and negative - so that we can continue to lobby on your behalf.

Please email our new Head of Policy, kirsten.hogg@scvo.scot, with your experiences.

Update 20th January 2020: While it was announced the draft Scottish budget would be published on 6th February 2020, there remains uncertainty facing voluntary organisations around future funding from the public sector.

Thank you to all those that have shared their experiences so far. We have heard from organisations that have received short-term extensions to their funding to mitigate the impact of the budget delay, as well as those that have had no updates on funding for the next financial year.

We have also written additional letters to Jamie Hepburn (Jamie Hepburn (Minister for Business, Fair Work and Skills), Malcolm Wright (Scottish Government Director General, Health & Social Care) and Alex Paterson (Chair of the NDPB Forum) to highlight the issues faced by the voluntary sector and to encourage mitigating actions wherever possible.

Update 31st January 2020: The responses we have received are provided below:

• Aileen Campbell (Cabinet Secretary for Communities and Local Government) - Letter from SCVO & response received
• Derek Mackay (Cabinet Secretary for Finance, Economy and Fair Work) - Letter from SCVO & response received
• Alison Evison (COSLA President) - Letter from SCVO & response received
• Jamie Hepburn (Minister for Business, Fair Work and Skills) - Letter from SCVO & response received

Update 17th February 2020: Response received from Jeane Freeman (Cabinet Secretary for Health and Sport) stating that 2019-20 funding will be rolled on for the first three months of 2020-21 for voluntary organisations.

Update 3rd April 2020: The importance of funding decisions being made and communicated as soon as possible is compounded by the financial aspect of the coronavirus outbreak. We have continued to press Scottish Government on this, and the Cabinet Secretary for Communities and Local Government has emphasised this to her cabinet colleagues. Her letter to SCVO may be useful in negotiations with sponsoring departments who have not yet communicated 2020/21 decisions.

We will continue to keep this page updated with any responses.