The Scottish Council for Voluntary Organisations is the membership organisation for Scotland's charities, voluntary organisations and social enterprises. Charity registered in Scotland SC003558. Registered office Mansfield Traquair Centre, 15 Mansfield Place, Edinburgh EH3 6BB.
SCVO Briefing Scottish Government debate: The UK Budget – Scotland’s Priorities
Multi-year funding
For over a decade, the Scottish Government has recognised the need for multi-year funding, committing to longer-term funding for the voluntary sector across multiple government strategies, including within several Scottish Budgets and Programmes for Government.
In discussions relating to multi-year funding, however, the Scottish Government and local authorities have expressed difficulty in providing multi-year funding to voluntary organisations, as their own funding in future years is unknown.
SCVO therefore welcomes The Chancellor of the Exchequer’s plans for a multi-year spending review, of at least three years, in Spring 2025.
While we remain concerned about the impact of the public spending pressures on voluntary organisations, a multi-year Spending Review should give the Scottish Government the confidence to progress their commitment to longer-term funding agreements for voluntary organisations.
SCVO stresses, however, that while multi-year funding is necessary to deliver Fair Funding for the voluntary sector, on its own it is not sufficient. Multi-year funding that does not incorporate the other Fair Funding elements—flexible unrestricted funding, timely payments, more accessible application processes, transparent approaches to monitoring and reporting, and inflation-based uplifts—will continue to undermine the sustainability of the voluntary sector. Scottish Government can and should take action on these issues to make much needed progress on their commitment to Fairer Funding for the sector by 2026.
To support the Scottish voluntary sector the UK Budget should:
- Action the commitment to multi-year Spending Reviews of three years or more.
- Commit to working constructively with the Scottish Government to support multi-year spending plans.
Sustainable funding settlement for Scotland
It is widely understood that Scotland’s voluntary sector is facing unprecedented challenges. Years of underfunding and poor funding practices, and crises such as the pandemic, and the cost-of-living crisis have put the voluntary sector under increasing pressure, exacerbating financial and operational challenges.
The most recent Third Sector Tracker found that in April, 62% of organisations believed that rising costs had affected the ability to deliver core services or activities since December 2023. Similarly, 47% of organisations reported cost increases in their top three challenges.
As costs for voluntary organisations have risen so have demands on services. In August 2021, 56% of organisations reported an increased demand for core services and activities, rising to 63% by April 2023.
Our sector offers essential services and support to people and communities across Scotland and is a key partner in the delivery of public services.
To support our sector’s invaluable contribution, the UK Budget should:
- Commit to working productively with the Scottish Government as part of the Budget process.
- Recognise the unprecedented challenges impacting voluntary organisations across Scotland by offering a sustainable funding settlement for Scotland which recognises the need for inflation based uplifts and supports and resources Fair Work.
Clarity on the future of the UK Shared Prosperity Fund (UKSPF)
SCVO and the TSI Scotland Network worked with partners across Scotland, and with UK Ministers, on the design and delivery of the UK Shared Prosperity Fund.
We have consistently stressed the importance of engagement with the voluntary sector in Scotland across the three UKSPF investment priorities.
As it stands, funding for the UKSPF will end in March 2025. Any loss of funding would have a significant impact in Scotland, with most organisations likely to consider ending projects, resulting in redundancies and loss of services that vulnerable people and communities rely on. To avoid this, there is an urgent need to provide certainty and clarity on these funds for the voluntary sector.
The UK Budget can recognise and make progress on Fair Funding by:
- Offering a one-year extension to existing funded projects. This would ensure that data on the impact of UKSPF can be analysed, shared and used by all partners, including the voluntary sector, in designing any replacement scheme.
- Committing to longer-term funding, so that more strategic and sustainable programmes can be put in place.
Conclusion
Scotland’s voluntary sector is an employer, a partner, and a vital social and economic actor central to UK Government’s economic growth ambitions.
The UK Budget is an opportunity for the new Prime Minister and the Cabinet team to recognise and support the many contributions of voluntary organisations, their staff and their volunteers across Scotland.
To make progress the UK Government must commit to progressing multi-year funding, ensure a sustainable funding settlement for Scotland, and provide urgent clarity on UKSPF funding.
Additional information
SCVO also support the priorities of the Civil Society Group (CSG), an informal collaboration of organisations representing members and groups from the charity sector and wider civil society across the UK.
SCVO letter to Rachel Reeves, Chancellor of the Exchequer.
About the voluntary sector in Scotland
The voluntary sector in all its diversity is a powerful force for positive change and a significant part of our economy. From grassroots volunteer-run community groups like village halls and playgroups to major providers of public services in social care and housing, the voluntary sector is present in every aspect of our society and is the glue that holds communities together, with over 46,500 voluntary organisations and over 1 million volunteers.
Together these organisations employ over 133,000 paid staff. A quarter of charities employ staff, and the average income of these charities is around £900k. However, three-quarters of charities are run entirely by volunteers and have an annual turnover of less than £80k. Many deliver vital services and work with some of Scotland’s most marginalised communities. SCVO’s State of the Sector statistics for 2023 are available online. To find out more about the voluntary organisations in your constituency visit the Geographical information section (pages 7-11) of SCVO’s State of the sector statistics.
