More than a quarter of charities predict funding fall as councils struggle

The report said local government is a significant funder of charities, currently providing 13p in every £1 of charity income.

Charities are predicting a fall in their funding as local authorities struggle with their finances (Alamy/PA)

More than a quarter of charities that work with local authorities have suggested their funding is likely to fall over the next year, a report has found.

The fall will come as council budgets continue to be stretched, Pro Bono Economics (PBE) and Nottingham Trent University’s VCSE Data and Insights National Observatory said.

It warned of charities being evicted from their council premises or forced to work in unsuitable buildings.

The fates of councils and many charities are entwined, and when one partner goes into difficulty, the other struggles too

Dr Jansev Jemal, Pro Bono Economics

Data from the VCSE Sector Barometer, which is the largest quarterly survey of charities in the UK, found that 28% of charities working with local authorities predict their funding will fall over the next 12 months.

The report said local government is a significant funder of charities, currently providing 13p in every £1 of charity income.

The report said the likely fall in local council funding for charities comes “despite widespread attempts by councils to pull more money in through council tax rises”.

Pro Bono Economics said it had previously calculated that council funding of charities had already reduced by 23% between 2009-10 and 2020-21, leading to an estimated £13.2 billion reduction in council funds to charities since 2010.

The latest research found that nine in 10 charities working with local councils described the relationship as “important”, and four in 10 described it as “critical”.

Public donations have dropped in the cost-of-living crisis, the report said, affecting charities’ ability to find alternative sources of funding to make up for council cuts.

Charities have already seen significant withdrawal of support from local government over the past decade, and the current difficulties in local government finances mean that the loss of will continue to grow

Dr Jansev Jemal, Pro Bono Economics

Dr Jansev Jemal, director of research and policy at Pro Bono Economics, said: “The fates of councils and many charities are entwined, and when one partner goes into difficulty, the other struggles too.

“Charities have already seen significant withdrawal of support from local government over the past decade, and the current difficulties in local government finances mean that the loss of will continue to grow.

“These cuts are being announced at pace, and charities across the country are anticipating further escalation in the months ahead.

“The hidden impacts of the council funding crisis matter too. Charities are being evicted from their council premises, or forced to reside in unsuitable buildings, where roofs are falling in and floors are deemed unsafe.

“This will generate extra costs and disruption to charities at a time they can ill afford it, and hit the people who rely upon them the most.”