Scottish Budget 2022/23

Scottish Budget 2022/23

Summary 

• The third sector fiscal resource budget will receive an £800,000 (3.5%) cut to its funding 
• This budget line funds support across the whole voluntary sector including many recent Scottish Government commitments welcomed by organisations across the sector 
• Short-term funding makes it challenging for voluntary organisations to plan for the future, creating uncertainty for staff, volunteers, and the people and communities they work with 
• Previous commitments to multi-year funding for 2022-2023 are absent in the Budget. 

Context 

A thriving and effective voluntary sector is vital to Scotland’s economy and society.  

Scotland’s voluntary sector is an employer, a partner, and a social and economic actor. Voluntary organisations employ over 100,000 paid staff, and more than 1 million volunteers work with us to support people and communities across Scotland.  

Covid 19 has put enormous strain on sector finances and, for many, increasing demand on services. Paired with the cost-of-living crisis, Scotland’s voluntary organisations are facing a huge demand for their services at a time when the future is more uncertain than ever.  

Together we can create a sustainable, resilient voluntary sector and ensure that voluntary organisations can play their part in creating the fairer, greener, healthier, and more inclusive society we all want to see. 

The cut to the Third Sector budget line 

Scotland’s political parties have recognised that the voluntary sector in Scotland has been at the heart of the response to the Coronavirus crisis, delivering essential services efficiently and flexibly. The Scottish Council for Voluntary Organisations (SCVO) and colleagues across the voluntary sector expected that the vital role of the sector, both during the crisis and in Scotland’s economic recovery, would be recognised in the Scottish Budget. Instead, we were disappointed to find a cut to the Scottish Government’s Third Sector Budget. 

The Scottish Government’s plans to reduce the fiscal resource line of the Third Sector Budget by £800,000 will have a significant impact on voluntary sector infrastructure. It is not yet clear where within the Third Sector budget these cuts will fall. This budget supports many intermediary bodies across the sector, including SCVO. This Budget line also potentially supports many of the Scottish Government’s recent commitments including: 

• Social Enterprise Action Plan 
• Volunteering Action Plan 

• A Programme for Government commitment to strengthen the influence of Third Sector Interfaces (TSIs) 
• The Community Capacity and Resilience Fund (CCRF)  
• The Strengthening Collaboration initiative 
• And many others. 

Many of these commitments had only recently been welcomed by voluntary sector organisations. Any Budget cuts will have implications for their delivery.  

The Third Sector Budget is not the only funding that flows to the sector from the Scottish Government Budget, but the Scottish Government do not collect or report on the total spend to the voluntary sector. The Third Sector Budget is therefore a clear signal of the level of Scottish Government’s support for the sector. 

While SCVO and the wider voluntary sector appreciate that the Scottish Government has difficult choices to make, this decision is a worrying signal that despite all that has been said about the importance of the voluntary sector during the pandemic, Scottish Government rhetoric does not translate that into action. 

We welcome the Scottish Government’s aspirations for volunteering, social enterprise, and broader commitments to recognise the voluntary sector as an equal partner. These aspirations are, however, unlikely to be realised without adequate resources. 

Multi-year funding 

Many voluntary organisations struggle with short-term funding arrangements that make it challenging to plan for the future. Short-term funding creates stress for staff, volunteers, and the people and communities our sector works with. 

For many years, SCVO, fellow intermediary organisations, and voluntary organisations across Scotland, have called for and highlighted the many benefits of multi-year funding for the voluntary sector.  

There is growing recognition by political party leaders and MSPs across all of Scotland’s political parties that the voluntary sector and the services our sector provides should be supported by sustainable multi-year funding. 

SCVO was disappointed to find that in this Budget commitments to multi-year funding for 2022-2023 were absent. We recognise that for future years, the Scottish Government Resource Spending Review will enable multi-year spending plans of three to four-years. Currently, however, the Spending Review framework does not specifically state that these plans will apply to the voluntary sector. SCVO encourage clarity on this and welcome commitments to engage with stakeholders, including the voluntary sector, during this process. 

The Spending Review is an opportunity to provide voluntary sector organisations with greater funding certainty and must: 

• make good on the Scottish Government’s commitments to multi-year funding for the sector 
• ensure multi-year funding includes inflationary uplifts, greater flexibility and trust, and more support for core operating costs 
• consider how local authorities can be encouraged to provide multi-year funding for the voluntary sector, given the reliance of voluntary organisations on funding at a local level. 

In the meantime, the Scottish Government must support the voluntary sector by striving to ensure timely decision making and payments for voluntary organisations in 2022-2023. 

Scottish Government proposals for new prompt payment guidance for procurement contracts, which suggest payment within 30 days, could be useful when considering timely payments. 

Conclusion 

We need the Scottish Government to invest in and recognise the voluntary sector as an employer, a partner, and a vital social and economic actor. 

Scottish Government’s plans to reduce the fiscal resource line of the Third Sector Budget by £800,000 is worrying and will impact voluntary sector infrastructure, commitments, and initiatives. 

Our sector needs recognition, resources, and, crucially, new approaches focused on creating sustainable multi-year funding. 

We hope that the Scottish Government and members from across the Chamber share our aspirations to create a more sustainable and resilient voluntary sector. 

Contact 

Sheghley Ogilvie, Policy and Public Affairs Officer, sheghley.ogilvie@scvo.scot 

About us 

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 2,600+ members, we believe that charities, social enterprises, and voluntary groups make Scotland a better place. 

About the Scottish voluntary sector 

Scotland’s voluntary organisations are focused on delivering vital services and empowering some of Scotland’s most marginalised communities. The sector has a role in all aspects of Scottish society, from tourism and housing to the justice and social care systems. 

The sector is an essential part of Scotland’s economy, encompassing an estimated 40,000+ organisations, from grassroots community groups and village hall committees to over 6,000 social enterprises, and approximately 25,000 registered national charities.