SCVO Briefing: Scottish Budget 2024/2025

The problem

Action is urgently needed in the 2024/2025 Scottish Budget to secure the voluntary sector’s essential services.  

The cost-of-living crisis continues to squeeze voluntary organisations – with demand for services increasing, costs rising, and financial uncertainty ongoing. In April, the Third Sector Tracker found:

• Demand for support had increased for 63% of voluntary organisations.
• 92% of organisations working directly with the public highlighted worsening emerging needs.
• 45% of organisations reported cost increases.
• 71% of organisations reported that financial issues were amongst their top three challenges.

Voluntary organisations play a crucial role in delivering on the Scottish Government’s three missions, which are centred on equality, opportunity, and community. At a time of clear need, this budget is an opportunity for the Scottish Government to support our sector to continue our vital work.

The solution

SCVO welcomes the Scottish Government commitment to deliver ‘Fairer Funding’ by 2026. SCVO continues to call for this approach to be aligned with SCVO’s definition of Fair Funding, much of which was endorsed in the Social Justice and Social Security Committee’s Pre-Budget Scrutiny report 2024-25.

In the 2024-25 Budget, the Scottish Government can take meaningful first steps to deliver Fair Funding.

• Pass on Barnett consequentials from the UK Government’s £100m support package for voluntary organisations in England, announced in the 2023 Spring Statement. This investment should include a mix of short and long-term support enabling voluntary organisations to both weather the current crisis and adopt energy efficiency measures.
• Implement multi-year funding of three years or more across several Scottish Government funds in the 2024/25 funding round and develop a multi-year funding model as standard by 2026.
• Resource Living Wage uplifts in grants and contracts as part of expanding the Scottish Government’s Fair Work First criteria and delivering on becoming a Fair Work Nation by 2025.
• Commit to annual inflation-based uplifts for public grant funding and contracts regardless of the type of delivery partner, recognising the impact of rising inflation on and the need for pay uplifts for voluntary sector staff.
• Ensure transparent monitoring and reporting on public sector funding of the voluntary sector. There is no accurate picture of how funding flows to voluntary organisations and from which budget lines. To ensure the sector, scrutiny bodies, MSPs and Ministers can understand the impacts of commitments on voluntary organisations, transparent monitoring – in the Budget and beyond - is crucial.

Testimonials

“It's incredibly worrying, we just received our gas and electricity quotes for the next two years, and they are going up 576% and 205%. No other options are available to us”.     

Medium voluntary sector organisation

“Like all voluntary organisations, we have very short-term funding, so while our contracts are on paper secure, everyone knows their job is only as secure as the current piece of short-term funding”.

Registered charity

“Everything we do is dependent on funding, and amounts are often not confirmed until very late in the financial year”.

Registered charity

“Due to annual funding from Scottish Government, which doesn’t cover our core costs, recruitment is often on short-term contracts or is subject to ongoing funding, of which there is no guarantee”.

Voluntary sector intermediary

Conclusion

The 2024/2025 Scottish Budget is an opportunity to recognise and support Scotland’s voluntary organisations at a time when they are being squeezed by the cost-of-living crisis. The Scottish Government also can take much needed and meaningful first steps towards a Fair Funding system that is long-term, flexible, sustainable, and accessible.

About the Voluntary sector in Scotland

The voluntary sector in Scotland is a major employer, a partner in delivering public services, and a vital contributor to society and the economy.

The Scottish voluntary sector:

• Includes over 46,500 voluntary organisations.
• Employs over 135,000 paid staff- 5% of Scotland’s workforce.
• Works with over 1.2 million volunteers.
• Had an annual turnover of £8.5 Billion in 2021.

The sector provides a diverse range of essential services and support, including; childcare, social care, emergency support, support into employment, housing, and towards digital inclusion, and a huge range of advice services. The sector also undertakes vital medical and environmental research, runs most of Scotland’s theatres, museums, galleries, and sports clubs, and campaigns for change on a huge variety of issues.

To find out more about the voluntary organisations in your constituency visit the Geography section (pages 7-11) of SCVO’s State of the Sector statistics.