The First Minister promised action, not warm words, the Budget delivered neither.

Last month First Minister Humza Yousaf joined colleagues across the voluntary sector at SCVO’s annual conference, The Gathering, where he shared that Fairer, multi-year funding for the sector was on the horizon. As part of the Scottish Budget process, he offered the voluntary sector “firm assurance that work, consideration, of how we give you stability in terms of funding, multi-year funding, is very much underway”.

Once the Budget work was completed, he continued, government would “advise to what extent we can bring forward multi-year funding - and that should include, absolutely will include, a greater number of at least two-year grants”.

Of course, promises to the sector on multi-year funding have been made countless times over the last few years, but with such strong assurances, forgive me for feeling optimistic- and even reminding colleagues that while multi-year funding would be a welcome step, Fair Funding is broader, and further action needed for a sustainable sector.

My optimism quickly began to fade when early on in the Budget Statement, Shona Robison, Deputy First Minister of Scotland and Cabinet Secretary for Finance, shared that she would be publishing single year spending plans for 2024/2025 in this Budget, revisiting a multi-year funding plan in the Medium-term financial strategy. Crumbs.

But all wasn’t lost, Fairer Funding has been somewhat of a buzzword over the last year, with commitments in last year’s budget, the Scottish Government’s policy prospectus, and, most recently, the Programme for Government (PfG). Behind the scenes we were told a huge amount of work had been invested. Progress on multi-year funding was surely then going to be replaced by something significant on Fairer Funding to support a sector that it is widely accepted is under pressure- with demand for services increasing, costs rising, and financial uncertainty ongoing.

Yet the Budget contained only a vague commitment:

“Our work on efficiency levers will include a review of grant models in operation, guided by our commitments to Fairer Funding for the Third Sector.”

After working on the Budget for several years I know that our sector often warrants barely a mention in the Budget Statement and within the draft Budget itself mentions are often fleeting, but for the first time I felt completely perplexed.

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.

In the Spring Statement the Chancellor, Jeremy Hunt MP recognised the extraordinary pressure of the cost-of-living and running-costs crises on the sector, announcing over £100 million of additional support for charities and communities in England. This resulted in just under £10 million of Barnett consequentials for Scotland over two years.

In July, the Scottish Government moved forward with their new Fair Work First criteria, impacting organisations applying for public sector grants through new requirements to pay the real Living Wage and provide effective voice.

And yet the Budget offered nothing. No additional funding. No commitments to uplifts for the real Living Wage, staff wages, volunteer expenses, rising energy bills, and endless other rising costs. No progress on Fairer Funding. Not even a commitment to the funding transparency needed to ensure the impacts of the Budget on voluntary organisations can be understood by the sector and others.

Our sector plays a crucial role in delivering on the Scottish Government’s three missions, equality, opportunity, and community. We provide practical and emotional lifelines for people and communities, support people on their journey out of poverty, highlight the causes of poverty, and share solutions. We employ 5% of Scotland’s workforce, support people to be economically active, work with 1.2 million volunteers, and undertake vital environmental and medical research. We are also part of Scotland’s public service infrastructure, providing a range of essential public services.

As the Budget dust begins to settle, I can’t help but wonder, am I missing something?

To learn more about the impact of the Scottish Budget on the voluntary sector, join our webinar on the 23rd of January.

Read our Budget response here and our briefing here.