Charities 'to face £3bn in cuts' says report

Charities are facing cuts totalling nearly £3 billion over the coming five years due to government spending reductions, according to a report released today.

The National Council for Voluntary Organisations used figures on the Government's spending plans produced by the Office for Budget Responsibility to calculate what they believe is the first authoritative figure for the impact of the austerity programme on charities.

They found that the voluntary sector will lose around £911 million a year in public funding by 2015/16, with a cumulative loss of £2.8 billion over the five years 2011-16.

Karl Wilding, head of policy and research at NCVO, said: "Putting an authoritative figure on the extent of the cuts to date has been like trying to pin jelly to the wall.

"Estimates have varied widely and this report provides a solid baseline figure based on the Government's own figures.

"Many charities are unwilling to speak out for fear they will jeopardise other funding streams, but we currently face the perfect storm of an increase in demand and nearly £3 billion public sector cuts - this is a significant cause for concern because it will significantly hamper the ability of charities to support those most in need."

NCVO said that the impact of the cuts will be felt unevenly across the charitable sector, with funding from certain government departments shrinking more dramatically than others.

It is possible that the total reduction will be "much higher" than the £2.8 billion estimate, said NCVO.

Today's report comes a week after research by the anti-cuts campaign False Economy suggested that more than 2,000 charities are being forced to close services and sack staff as local authorities slash their funding.

Shadow Cabinet Office minister Tessa Jowell said: "What is becoming apparent is the scale of the cuts that charities are facing across the country, which are beginning to undermine the very building blocks of community life.

"What is lost in the next few years may be impossible to rebuild in 10. Soaring speeches on the Big Society will ring hollow when the people that are responsible for delivering it are being made redundant and cutting back on the services that they offer.

"It beggars belief that the Tory-led government still do not have a complete picture of the impact that their actions will have.

"That's why, at the very least, the Tory-led government should carry out a thorough and comprehensive review of the impact of their tax and spending plans on charities and local voluntary organisations, before the House returns in September."

A Cabinet Office spokesman said: "Big Society offers the voluntary sector many new opportunities to grow.

"Our reforms will allow the voluntary sector to bid for public service contracts worth billions of pounds. Just last week Big Society Capital launched with an expected £600 million to give the sector access to much-needed finance, which will help them expand and bid for these new contracts.

"And we're doing more to support giving and philanthropy including measures in the Budget estimated to be worth £600 million over the lifetime of the Parliament. This is just the start.

"Parts of the sector are already thriving, this week Social Enterprise UK reported their sector had stronger growth than mainstream business.

"We do have to deal with the country's debt, that costs £120 million a day in interest alone.

"Getting public spending under control is as important for charities as it is for every other part of society.

"But we are supporting them, already over 1,000 organisations which are vulnerable to public spending cuts have been awarded funding from our £107 million Transition Fund."