£2.1billion statutory funding drop forecasted by 2017

NCVO is predicting that public funding for charities could drop by 12 to 15 percent by 2017/18, losing the VCS an estimated £2.1billion.

The umbrella body’s report Counting the Cuts uses Office for Budget Responsibility forecasts of public spending and its UK Civil Society Almanac data on charities’ income sources. The prediction is made in comparison to data from 2010/11, the latest year for which it is available.

The analysis estimates the impact that reductions in public spending will have on the VCS, and states that such reductions are likely to focus on departments which are important sources of income for charities. Local government will be hit especially hard, the report speculates.

The report states that if the cuts are passed on proportionately to charities the sector’s income will be £1.7billion (12 percent) lower in 2017/18 than it was in 2010/11, using 2010/11 prices. However, if cuts to charity contracts and grants are disproportionately large, as evidence from Compact Voice’s survey of local authorities in England suggests they have been, the reduction could be as much as £2.1billion (15 percent).

The government is due to announce the outcomes of its spending review for 2015/16 in June, which NCVO’s report states is one factor that could have an impact on forecasts for 2015/16 and beyond.

NCVO also states that with the general election due in May 2015, an incoming government will have the opportunity to set out new spending plans and therefore its estimates beyond 2015 should be treated as provisional.

To download NCVO’s Counting the Cuts visit www.ncvo-vol.org.uk/sites/default/files/files/counting_the_cuts_2013_2.pdf.

To download the results of Compact Voice’s survey of local authorities visit www.compactvoice.org.uk/resources/publications/local-authorities-and-voluntary-sector-investigating-funding-and-engagement.