Recognising the voluntary sector's vital role in our economy 

Last week brought another Spring Budget – and it all felt a bit like Groundhog Day, didn’t it? Pre-election giveaways caught the headlines – against a backdrop of low growth and productivity.  

Disappointingly absent from the Chancellor’s statement was recognition of the contribution of the voluntary sector. Our essential sector is a major employer, a partner in delivering public services, and a vital contributor to society and the economy. Yet, it feels that the sector, its employees, and its volunteers remain an afterthought, while the communities and people we work with, and support, feel increasingly isolated. 

Last week, SCVO published the latest findings from the Scottish Third Sector Tracker (Wave 7). The Tracker began during the Covid pandemic and, wave after wave, the data show that organisational finances along with rising costs/inflation and difficulty fundraising persist as top challenges for the voluntary sector.  

There is a 10% increase in the number of organisations cancelling or deferring planned programmes, projects, and services than this time last year. Resource shortages - financial, paid staff and volunteers - are key challenges organisations are facing in meeting demand for their services and programmes of work. There has also been a 6% increase since Spring 2023 in the number of organisations reporting that recruitment and retention of staff is a significant issue. 

Here in Scotland politicians at national and local levels are supportive of a ‘wellbeing economy’ or so they say. Yes, economic development should be a priority, but behind the rhetoric there is so far very little action in a country where the cost-of living crisis is still a reality.  

Over half (53%) of organisations told us they are concerned about energy prices, but significantly more (84%) are concerned about the impact of those prices on the people and communities they serve, with 70% of organisations believing that financial hardship has become worse. 

The challenges faced by our sector are a result of societal and economic policy choices and we must work together to solve these issues and improve people’s lives and wellbeing. Fair funding is an obvious starting point, but it won’t be enough. The National Performance Framework (NPF) highlights that ‘our economy must be environmentally sustainable, inclusive and benefit all our people and communities’. It is clear, then, that the role of the voluntary sector in our economy is essential.  

Our most recent figures highlight that in 2022 the Scottish voluntary sector's turnover was £9.2 billion, up from £8.5bn in 2021; and Scottish voluntary sector spending was £8.8 billion, up nearly £1bn from £7.9bn in 2021. That same year, the sector also employed just over 133,000 people in Scotland, making up 5% of the workforce. A recent paper from the Royal Society of Edinburgh also points out that ‘third sector organisations can help to reduce public expenditure, either by providing services in health, social care, or education, which the state would otherwise have to provide or by reducing the need to use public services.’  

The economy does not exist in a vacuum. As consumers, producers and citizens we all have a role to play in it and the contribution of our sector must be acknowledged and valued. We need to change the way we work together if we don’t want more waves of the Tracker telling us that voluntary organisations, and the people they support, are struggling.  

If we want an ‘economy that is ecologically accountable as well as socially responsible’, as outlined in the National Performance Framework, we need strong and genuine collaboration across sectors and we must be listened to. The voluntary sector is about innovation, entrepreneurship, research and development, partnership and prevention, as well as tackling poverty or supporting people into employment. It needs investment as much as a seat at the table. If not now, when?