But this is only the start: the Local Government Association estimates that by 2019/20 councils will have a 29% shortfall between revenue and spending, a funding gap of £16.5 billion a year.xxvi In Scotland, the Scottish Government has sought to maintain the overall share of its budget that goes to local authorities ‘despite funding cuts imposed by the UK government’. Councils will lose on average 2.6% in cash terms (6.4% of revenue budget)xxvii
Impact of cuts on the voluntary and community sector Public sector spending cuts are having a direct impact on the 25 – 35% of voluntary and community organisations that rely on the state for funding. An analysis of cuts to voluntary organisations in London and 8 other major cities, undertaken by LVSC and GMCVO found that in all areas VCOs were experiencing rising demand for their services and falling income across all income streamsxxviii. However, sectors / services that are most reliant on government funding have been hardest hit: •
Children England estimates that organisations working with children and young people will lose over £400 million between 2011/12 and 2015/16xxix;
•
CLINKS reported that in 2011 86% of organisations working in criminal justice had been negatively affected by the cuts and wider policy changes; 80% reported a fall in income, 77% were drawing on reservesxxx;
•
Justice for All has claimed that ‘advice agencies are on the brink of collapse’, with 22% facing closure and most making major cutbacks
•
WRC reports that 75% of women’s organisations in London had to reduce or close services and 58% made staff redundancies in 2012/13, even though demand for their services had increased during that timexxxi.
Although there are more voluntary and community organisations (VCOs) in less deprived areas, these are more likely to be unfunded organisations working in the field of arts, culture and education, reflecting the greater levels of social and cultural capital in such areas. Organisations in the most deprived areas tend to be larger (£100,000+) and more involved in economic well-being and delivering public services; significantly organisations in these areas are more likely to be publically funded and therefore more susceptible to reductions in public expenditurexxxii. This suggests a high degree of interdependence between local authorities and local voluntary organisations in certain neighbourhoods: the voluntary sector providing reach and responsiveness; councils providing resources. The combined pressures on both is likely to lead to reduced provision and worse outcomes in the most deprived areas. Local authority planning and development budgets were an early spending target, being cut by 43% on average in 2010/11. This was largely due to significant cuts in economic and community development programmes, particularly in London and the northern and midlands regions of Englandxxxiii. This is likely to have had a knock on effect on the resilience of local communities. At the same time, Regional Development Agencies were replaced by Local Economic Partnerships, with much greater involvement of business and no requirement to engage the
Belinda Pratten and Rosie Chapman Associates www.bprcassociates.com
Page 10 of 23