Equalities & Human Rights Committee Debate - Valuing the Third Sector

1 December 2020

About SCVO

The Scottish Council for Voluntary Organisations (SCVO) is the national membership organisation for the voluntary sector. We champion the sector, provide services, and debate big issues. Along with our community of 2,000+ members, we believe that charities, social enterprises, and voluntary groups make Scotland a better place.

Scotland’s voluntary sector

The Scottish voluntary sector encompasses an estimated 40,000+ organisations, from grassroots community groups and village hall committees to more than 6,000 social enterprises, nearly 25,000 registered national charities, and over 100 credit unions. Scotland’s voluntary organisations are focused on delivering vital services and empowering some of Scotland’s most marginalised communities. They also have a big role to play in protecting Scotland’s environment as well as campaigning and advocating for change. Together, they employ over 100,000 paid staff, work with over 1.4 million volunteers, and have a combined annual turnover that reached £6.06bn in 2018. This includes a range of mixed-income sources such as contracts, grants, and fundraising.

Our position

SCVO welcomes the debate on Valuing the Third Sector and the opportunity to explore the important role Scotland’s charities and voluntary organisations play in strengthening our communities, delivering vital services, meeting national objectives and building a wellbeing economy.

We thank the members of, and clerks to, the Equalities and Human Rights Committee, who have proactively sought the views of Scotland’s voluntary sector and interrogated the evidence essential to building a clearer picture of how Scotland’s voluntary sector operates, the value it brings and the challenges it faces.

We also commend the committee for its comprehensive and probing submissions to the Scottish Government – following its collection of evidence over the last two years. The committee plays a crucial role in holding The Scottish Government to account on priorities and commitments and we look forward to working with the committee, parliament and government to advance many of the matters they have raised directly with the Scottish Government.

The impact of the COVID-19 pandemic has understandably drawn much focus and attention. Indeed, SCVO is currently leading our #NeverMoreNeeded campaign to help remind government, funders, donors and the general public of how essential the voluntary sector is now - and will be in the future.

However, the work of the committee clearly predates this and the pandemic must not become our sole focus. In fact, the pandemic has only served to underline many of the crucial points SCVO has been making over the years, and it is important to retain a focus on these strategic and structural issues:

• That the sector fulfils a role that no statutory body can
  • That the resilience of the sector is severely diminished
  • That strong partnerships with local authorities can enhance results
  • That the sector exists on insecure funding models

Scotland’s Budget 2021/22 therefore offers an opportunity to begin the process of embedding the voluntary sector as a key partner, building sustainable funding and reinforcing a weakened sector which fulfils a critical role not only in times of challenge, but as we seek to establish a fairer, greener, wellbeing-focussed Scotland.

Sustainable funding

Voluntary sector funding in Scotland is complex and precarious. Many voluntary organisations operate on an intricate patchwork of statutory funding, fundraised income, earned income and grant income. Details of this can be found in our ‘state of the sector’ survey.

There is no silver bullet to funding issues facing the sector. The Scottish Government, local government, independent funders and the sector itself all have a key role to play in ensuring the financial sustainability of the sector.

During the pandemic, a light was shone on the financial vulnerability of the sector:

SCVO has published an overview of our research which lays bare the impact the crisis had on voluntary organisations and the people and communities they support. 

The Scottish Government’s financial support for the sector was welcome and considerable. However, even with this investment, SCVO sees continued financial uncertainty for the sector – with 20% of charities reporting a critical threat to their financial viability in the next 12 months.

We would also draw the Committee’s attention to the Scottish Government’s reiterated commitment to longer term funding for the sector, words which we have heard before but very rarely see in practice. We appreciate that the Scottish Government has responded to the committee’s enquiries on longer term funding and suggested that multi-year indicative grants are being offered “where relevant”. This is welcome progress but SCVO would hope to see further developments in future.

To be optimistic, there are valuable lessons to be learned from the ways in which some funders worked with the sector during the pandemic – particularly where voluntary organisations were given the freedom to use funds to meet needs within their communities. Being allowed to repurpose funding to meet critical (but previously unidentified) need highlights the importance and viability of introducing flexibility to funding arrangements.

Partnership of equals

Anecdotal evidence suggests that, while independent funders are contemplating the future of grant giving, local authorities are returning to a ‘business as usual’ command and control relationship with the voluntary organisations they fund or contract with.

The issues identified by the Committee last year around the need for longer term funding, core funding, strategic commissioning and funding/procurement mechanisms – which encourage rather than deter partnership working – remain crucial. 

These issues were included in our submission to the Advisory Group on Economic Recover (AGER) and we were pleased to have these recommendations endorsed in the Group’s final report.

The Scottish Government response to AGER commits to “strengthening collaboration” between the voluntary sector, local authorities and Scottish Government, and in working with the Scottish Government and COSLA to explore how this work will look, we are hopeful that this will include many of the issues raised by the Committee. Naturally, we encourage the Committee to take an interest in the progress of this work. 

Conclusion

SCVO welcome this valuable debate on the contribution Scotland’s third sector makes to our society.

While the immediate impact and aftermath of the pandemic understandably dominates thinking and decision making, it is important to remember the issues and concerns identified by the committee in advance of the pandemic. Many of the challenges facing the sector are not new and require strategic (rather than reactive) solutions.

That said, Scotland's voluntary sector does face immediate risk. Increased demand for some services, a fall in giving and the stymieing of fundraising, trade and events has created a ‘perfect storm’ for organisations already operating on the margins. Support is required to ensure the immediate viability of the sector and to ensure it can play a part in any future crises and contribute to a dynamic recovery.

We hope that members will appreciate the vital role the voluntary sector plays in communities right across Scotland and look forward to working with them with a view to protecting, supporting and advancing Scotland’s voluntary sector organisations.

Contact

Craig Wilson, Public Affairs Officer, craig.wilson@scvo.scot, 07950 837 670