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Scottish Parliament

11/07/2019 | Press release | Distributed by Public on 11/06/2019 18:17

MSPs call for additional funding support for third sector

A Holyrood Committee is calling on the Scottish Government to increase its equalities and third sector funding support and for all public bodies to look at innovative ways to fund the third sector.

A Holyrood Committee is calling on the Scottish Government to increase its equalities and third sector funding support and for all public bodies to look at innovative ways to fund the third sector.

In its pre-budget report, the Scottish Parliament's Equalities and Human Rights Committee said the work of the third sector is vital in realising equalities and human rights in Scotland, but how it is funded needs reviewed.

Reduced and short-term funding, the Committee heard, has led to job insecurity, loss of talent, and essential services either being reduced or stopped altogether, directly affecting the communities and vulnerable people who rely on them.

The Committee welcomed the Scottish Government's move to a three-year funding model, but considers that more can be done to ensure that more people benefit from the support services provided by charities promoting equalities and human rights.

Competition for funding between organisations acts as a disincentive for organisations to work together. Public bodies could give longer notice of applications for funding, helping smaller organisations to apply and enabling them to work collaboratively.

Applications should be made more inclusive, so diverse groups have equality of opportunity, otherwise particular groups will be further disadvantaged by the funding process.

Committee Convener, Ruth Maguire MSP, said:

'The third sector provides huge value to communities right across Scotland. More funding would give greater stability to the support these organisations provide.

'Crucially, this will help not only those who benefit from that support, but also the many women, carers, and people with disabilities employed by the sector.

'We've seen that the Scottish Government can move to a three-year equalities budget cycle, now we want other funders to follow suit and have asked the Scottish Government to set up a working group, involving key stakeholders, to examine longer-term funding models.

The Committee acknowledges financial pressure all public bodies, including Scottish Government and councils, are facing and calls on the Scottish Government to urgently review with its local government partners how the third sector is funded.

Ms Maguire added:

'The Committee found that charities across many sectors are at the sharp edge of these financial pressures.

'The Committee would like to see a real drive to strengthen the third sector in Scotland with additional funding available to promote and facilitate co-operation and collaboration to provide the services that are so vital in realising equalities and human rights.'

The full report, 'Looking ahead to the Scottish Government's Draft Budget 2020-21: Valuing the Third Sector', will be available here.

Background

The third sector is made up of non-governmental and non-profit organisations, including charities, social enterprises, voluntary and community groups, credit unions and development trusts. Scottish Council for Voluntary Organisations (SCVO) estimates there are over 40,000 third sector organisations in Scotland. This includes approximately 24,000 charities, 20,000 community organisations and 100 credit unions. Over 40% of organisations work in either social services or health.

The Scottish Government's Promoting Equality and Human Rights budget is £24.6 million for this current financial year (2019/20), an increase of £1.9 million from 2018/19 (a real-terms increase of 6.2%)15. This budget line over a ten-year period has, however, seen a real-terms cut of £2.6m, (based on 18-19 prices), which equates to 10%.

Around 25% of third sector income comes from public sector contracts to carry out certain services, much with local authorities. Local authorities receive around 40% of their total revenue income from the Scottish Government each year in the form of the General Revenue Grant[1]

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[1]https://www.gov.scot/binaries/content/documents/govscot/publications/statistics/2019/02/scottish-local-government-financial-statistics-2017-18/documents/scottish-local-government-finance-statistics-2017-18/scottish-local-government-finance-statistics-2017-18/govscot%3Adocument/scottish-local-government-finance-statistics-2017-18.pdf