Voluntary organisations are struggling. Will government recognise the scale of the challenge?

Summer 2022 has been like no other, dominated by excessive heat, drought, and what we have all learnt is the wrong type of rain. The political climate has fared little better, paralysed by a leadership contest while energy costs and inflation spiral. Despite the increasingly gloomy economic outlook and a growing consensus that we face a cost-of-living catastrophe on the scale of the Covid-19 pandemic, solutions – like some political leaders – have been hard to come by. 

Action is finally on the horizon. Next week recess ends, and two key political events will take place; a new Prime Minister will enter Downing Street, and the Scottish Government will publish its 2022/2023 Programme for Government. The summer of discontent may finally be abating.  

As always, however, the devil will be in the detail. Voluntary organisations, like households, are affected by rising costs. The voluntary sector, public services, and businesses are also exposed to uncapped energy prices. Between December 2021 and April 2022 86% of organisations reported rising costs. A figure that’s expected to increase as outgoings soar. 

Voluntary organisations are struggling, wrestling with a running costs crisis while the cost-of-living crisis fuels demand for services and undermines funds. The UK and Scottish Governments need to recognise these issues and their long-term effects are likely to be with us for years, not months. 

In the voluntary sector, these challenges and their impacts are well understood and anxiety about the impacts on staff, volunteers, and people and communities across Scotland is building.  A mix of short and long-term solutions are urgently needed from both the new Prime Minister’s government and the Scottish Government. 

As the cost-of-living crisis bites, Fair Work for the Scottish voluntary sector’s workforce must be a priority. SCVO welcomes the Scottish Government’s plans to become a Fair Work Nation by 2025 and to extend the Fair Work First criteria to include the Living Wage. Years of underfunding, followed by Covid 19, and the running costs crisis, however, mean these ambitions cannot be achieved without additional resources.  

To support organisations to pay the Living Wage, public grant funding and contracts should include a Living Wage uplift. An uplift will ensure the skilled and experienced voluntary sector workforce responsible for delivering public services and other essential support can be paid the Living Wage. SCVO continues to engage with the Scottish Government to get clarity on what the extension of the Fair Work First criteria to include the Living Wage means for voluntary organisations, and how this will be resourced and implemented, ensuring organisations will be supported. 

Similarly, annual uplifts in grant funding and contracts are essential to keep the lights on, secure services, and uplift wages to protect the living standards of those paid above the Living Wage rate. 

Timely decision making and payments are also a short-term solution that could have a significant impact. Delayed decisions from Scottish Government departments, particularly when funding is annual, undermines job security - one of the five Scottish Government Fair Work Dimensions - and continuity of service delivery. Timely decisions and payments are central to the sustainability of the sector and make a real difference to the job and financial security of voluntary sector staff. 

The crisis should also encourage the Scottish Government and other funders to begin the process of long-term change to how they fund voluntary organisations. Changes should include the move to fair, flexible, and accessible multi-year grant funding and contracts to support organisations to plan through the crisis. SCVO cover these issues in detail in our proposals for the Programme for Government and our latest submission to the Finance Committee.  

We will brief MPs at Westminster on the running costs crisis facing our sector over the next few weeks. As the crisis progresses, we will continue to collect evidence from across the sector and explore emerging challenges and their solutions, both in Scotland and with our sister councils across the UK. You can your share your experiences here.  

We look forward to next week’s announcements and working with the Scottish and UK Governments to create the funding security essential for a sustainable voluntary sector which can survive the running costs crisis, support people through the cost-of-living crisis, offer Fair Work, and deliver quality outcomes. 

Read our proposals for the Programme for Government 2022/23.  

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