Beyond the cuts

How are children and young people's charities facing up to reductions in funding from local and central government – a situation predicted only to get worse over the next three years?

This report (Beyond the Cuts ) from the National Children's Bureau based on a survey of a range of its members, large and small, sets out a pretty stark picture. Responses range from adapting to merging to closing down.

Basic facts

• There are 34,000 charities in England whose primary beneficiaries are children and young people.
• 91% are 'small' with income of less than £100,000 a year, operating at a local level
• The calculations done for the report show that children's charities will lose at least £405 million of statutory funding between 2011 - 2016.
• The impact of the funding cuts on them is greater because public funding is a greater proportion of their income (52% overall) compared to the voluntary and community sector as a whole (38%).
• Children’s charities are less likely than the rest of the voluntary sector to receive income from private businesses – just 1% of their income.
• Because the 2010 Spending Review included a commitment to protect spending on schools and health, voluntary organisations providing other essential services – such as early childhood services, youth and play services and family support – are likely to bear the brunt of the cuts.
• Reductions to the Early Intervention Grant for local authorities' funding of a whole raft of services from early years to mental health support in schools, this paints a challenging picture for a range of children’s charities providing prevention and early support services outside school.

What actions are charities taking?

• Reducing the number of staff they employ and trying to increase their support from volunteers
• Cutting back on the range and level of services they offer
• Developing consortia and mergers
• Reviewing fundraising strategy
• But around a fifth think it's 'very likely' that they will close in the coming year

What are some of the biggest issues?

• Lack of capacity to develop partnerships and shared services – made worse by fewer staff and increased demand for services
• Lack of understanding about new business and funding models
• Confusion about the impact of reforms in health and social care

Recommendations include

• Office of Civil Society to faciliate a coherent strategy for the children's sector, addressing some of the deep seated issues like building sustainable partnerships through mergers and shared back office services; different funding models such as social investment and payment by results;supporting new relationships with businesses and the private sector.
• A more consistent approach to outcomes frameworks and the way that outcomes are measured.
• Local leaders to ensure that they actively engage with the voluntary sector, and involve them in emerging strategic partnerships (Health & Well Being Boards).
• Better dialogue and information sharing from commissioning bodies.
• Stick to Best Value statutory guidance: considering economic, environmental and social value when making decisions about services for children and young people; not passing on disproportionate reductions to local children’s charities; and engaging the children’s voluntary sector and service users in decision-making.

Read Beyond the Cuts

Navca have published a funding report (August 2012) giving an overview of how cuts are affecting small charities and community groups. One of the key findings is that children and young people’s organisations are consistently reported as being particularly affected by cuts in funding. In many areas, organisations that work with the most deprived communities have also faced significant cuts or are likely to do so in the near future, at the same time that demand for their services and activities is increasing. Here's more about Funding local voluntary and community action.

The Ripple Effect published last year, was evidence of the important and unique role that children’s voluntary organisations play in reaching diverse communities, engaging service users, and providing flexible, innovative and cost-effective services that centre around the needs of the child (‘the ripple effect’ indicating the ways in which children’s charities add value to and enhance statutory services).

† Image by lovestruck.