How economic austerity is affecting children's charities
Research into how public spending cuts will affect the children and young people's voluntary sector paints a sobering picture
We all know the government's overarching objective is deficit reduction. But how are cuts to public spending affecting organisations that work with vulnerable children? The National Children's Bureau (NCB) has published research that estimates how austerity measures will affect the children and young people's voluntary sector over the next four years, and asks how organisations are adapting to the new funding climate.
Beyond the Cuts paints a sobering picture of the sector's future, estimating that the 34,000 charities in England working primarily with children and young people will lose £405m in statutory funding between 2011/12 and 2015/16, with funding cut by over 8% in 2015/16 compared to 2010/11. And these are cautious estimates.
The finances of the children and young people's charities make them stand out from the voluntary sector as a whole. They are more likely to receive statutory funding than the average voluntary organisations, but four times less likely to receive corporate support. So the sector is potentially more vulnerable to this period of austerity, and may struggle to access new funding streams such as investment from private business.
Ultimately, cuts like these are bad news for children and young people. These organisations benefit children, young people and families directly, providing support, drug and alcohol advice and services, recreational opportunities and mental health care. They also add value to and improve statutory services – supporting outreach, reducing dependency on statutory support by giving help early on, and helping local planners and statutory services understand local needs. For example, one community organisation based in a housing estate worked with local schools to help them take forward their pupil premium-funded activities, acting as a broker between the schools and local parents whose children were struggling. The community and state worked together to tackle educational inequalities.
Amid rigorous austerity measures, the sector is taking action to manage reduced resources. Many organisations are introducing efficiency measures and looking to market themselves in different ways. Some are reviewing their fundraising strategies, pursuing alternative business models or mergers, or investing in their voluntary workforce.
But, with a significant minority of the charities we consulted for Beyond the Cuts believing it is "likely" or "very likely" they will be forced to close in the next 12 months, some charities face tough decisions that will have a direct impact on the children, young people and families who use their services.
One charity, Caritas Diocese of Salford, helps vulnerable teenage mothers by providing accommodation and support as they develop their parenting skills. Due to funding cuts, it has closed and cut back two of its mother and baby homes – leaving areas of Manchester and Bolton without the specialist support they once received. Caritas Diocese of Salford has also made redundancies and cut staff hours but, in spite of these measures, it says it needs more support and funding to be able to "end a self-perpetuating cycle that is so difficult to break out of without a helping hand" and to continue the valuable work they do with vulnerable young mothers and their children.
However, finding positive solutions will require new ways of working and thinking. Our consultation revealed that charities lack the time and resources to develop new partnerships that could help them work more efficiently. Many organisations will not have experience of operating a mutual or social enterprise or managing a payment-by-results contract. And some are still unclear about what the local landscape will look like, as we move through a period of significant reform, particularly in health and education.
So what next? Children's charities themselves must be at the forefront of the creation of solutions to ensure we have a thriving and effective sector. For example, at NCB we are working with partners to broker relationships between business and the youth sector; helping to get the children and young people's voluntary sector ready for social investment; and as a Department for Health strategic partner, providing a voice for the children's voluntary sector, channelling their experiences, knowledge and views into health policy development.
At the same time, there is still a role for national government. It is right that decisions about local services are taken by local government and communities in partnership. But we must not underestimate the impact of having a national government that makes clear that a thriving children and young people's voluntary sector is a real priority, and that puts its weight behind the development of new partnerships and solutions.
That's why we are calling for a government led analysis of spending on the sector, as well as a nationwide survey of children and young people's charities to assess in further detail the impact of austerity measures. We also want the government to help facilitate the development of a strategy for the sector, in partnership with local government, business and charities themselves.
As Baroness Tyler of Enfield says in her introduction to the report, the research provides "a good grounding for further analysis and debate about what austerity will mean for children's charities."
Zoe Renton is head of policy at NCB
1 May 2012