Evidence library

The issues highlighted by the 2019 inquiry are similar to those raised at the Committee’s earliest stakeholder evidence sessions in 2016 and limited progress has been made. To effectively provide for their communities’ needs, public bodies must better understand their communities and continue to innovate.

Short-term public funding, sometimes for one year or less, means that organisations can struggle to deliver projects and plan their workforces. This situation could lead to job insecurity, high staff turnover and a resulting loss of knowledge and expertise. The resulting time and money devoted to recruitment and training adds a further burden, diverting resources away from frontline delivery. Short term year-on-year funding means that projects are often very precarious, thus making “long term planning impossible".

Conclusions of the inquiry include:

• The stretched nature of third sector funding and short-term funding cycles is causing “fragility” in some third sector organisations. Reductions in local government budgets, and a lack of flexibility in where savings can be made, is also contributing to reduced funding for the third sector.
• Competition for funding to survive and continue supporting people could lead organisations to stray away from their purpose, leading to an erosion of third sector values. Also, equalities groups are being pitted against each other in funding streams and the tendering and procurement process leaves equalities and rights “to the market”.
• The competitive funding environment also puts smaller third sector organisations at a disadvantage. Competition between organisations seems to be disincentivising partnership working, despite the apparent enthusiasm of all parties for closer and more trusting relationships.
• Short term funding impacts on third sector organisations’ ability to retain and develop staff. Some staff are being employed as supply workers on zero hours contracts creating a constant churn that affects organisations’ ability to plan ahead. Third sector organisations consider five years to be optimum length of funding.

-