State of the Sector
Surviving or Thriving 2016 survey results
During May and June 2016 VONNE undertook the eighth survey in our continued monitoring of the state of the sector in the North East. In a period of ongoing austerity and public spending cuts the survey results show the Voluntary, Community and Social Enterprise (VCSE) sector continues to respond to the challenges these issues pose to North East communities. Read Jane Hartley's blog on the findings.
Just over 100 organisations responded to the survey, representing a broad cross section of VCSE organisations in the region. These range from small, neighbourhood groups to large national enterprising charities. The majority of respondents predominantly fell into the small to medium sized organisational category with a turnover between £10,000- £1m and the majority were service providers, with the largest service provision category being health and wellbeing.
Respondents were represented from right across the region covering every local authority area and between them they supported over 180,000 individuals in the North East, and almost 7,000 other organisations. They employ over 2,480 people and work with nearly 3,000 volunteers.
The previous survey was carried out in 2014 and comparative figures are shown in brackets. Over the past 12 months respondents said:
- 85% have experienced an increase in demand for their service (71% in 2014)
- 61% have increased the number of services provided (35%)
- 72% have had an increase in numbers of beneficiaries (42%)
- 43% only have reserves to last up to 3 months (41%)
- 46% have seen their grant income decrease, 17% have seen it increase.
- 44% have seen their earned income increase, 21% have seen it decrease.
- A third of those who have experienced a reduction of income did not expect that loss.
Looking to the coming 12 months:
- 45% will be or are considering recruiting more staff. (38%)
- 29% will be or are considering reducing staff (50%)
- 81% anticipate an increase in volunteers. (80%)
- 68% of organisations are looking to provide more services (65%), whilst 33% are considering closing a service. (44%)
- 69% are planning on increasing the number/type of beneficiaries they support. (63%)
- 53% plan to or are likely to use reserves in the coming financial year
- 14% may close in the next 12 months (21%)
- Local authorities continue to provide a significant source of income for the sector in the form of grants, with 77% of recipients receiving grants.
Tracking responses over the years
As this is the eighth survey we now have a body of evidence dating back to spring 2009 with clear trends over time. The most significant responses in this year’s survey are the sharp increase in demand for services reported, up from 71% to 85%. The sector has responded to need by organisations increasing the number of services they provide, 61% of those doing so, compared to 35% previously. A significant 72% have had an increase in the numbers of beneficiaries, perhaps put down to the impact of cuts to local authority budgets and services, welfare reform and increases in those living in poverty and debt.
There has been a steady rise in the numbers reporting a decrease in funding over the last 3 years which remains consistently high. However, the sector continues to adapt to survive with a marked change in income mix reported this year. 46% have experienced a decrease in grant income, 21% a decrease in earned income, but 44% have seen their earned income increase in this latest survey.
Over the years we have seen a shift from local authority grant funding towards contract based funding but those in receipt of contract funding via the local authority has remained fairly static between 2014 – 2016 at circa 50%.
Interestingly, decreased income from grants from charitable trusts and foundations was the leading source of lost income in this latest survey, followed by lottery funding, local authority contracts and grants. Earned income from selling goods and services was the leading source of income followed by grants from charitable sources and lottery funding.
The number of those with no reserves to fall back on has decreased slightly from 23% to 21% but is still worryingly high. There are still concerns about the numbers planning on utilising their reserves, with 53% responding they will or are likely to use theirs in the coming financial year.
20% have lost staff in the past 12 months, compared to 33% in 2014, a welcome downward trend, and less reporting they plan to lose staff in the coming 12 months. However, the majority of respondents in this latest survey reported no change to numbers of volunteers or paid staff which indicates the sector is attempting to meet increased demand without expanding human resources.
The patterns over the last few years illustrate an increasing reliance on reserves, loss of substantial funding, and a number of organisations shrinking. Organisations are facing significant continued rising demand, but with public sector spending cuts and limited reserves, they are now in a fragile state to respond appropriately.
One respondent summed up the issues well in this comment:
“The VCSE provide services that take the strain of many statutory bodies, which themselves are already under pressure. Many people in the community will be left without services to support them. Food banks are operating, high levels of people living in poverty, the health and well-being of people is declining, now is a time when VCSE should be operating at its best to address these issues, but sadly due to cut backs voluntary agencies are closing and this will have a catastrophic effect on those who are most in need.”