The report Beyond the Cuts, by the National Children’s Bureau (NCB) estimates that 34,000 charities in England that work primarily with children and young people will lose £405 million in statutory funding in the five years from 2011/12 to 2015/16.
It warns that children and young people’s charities are more vulnerable to these cuts as they are more reliant on statutory income and are four times less likely to receive corporate support.
A consultation of 74 children’s charities by the NCB into what changes to funding they are experiencing and how they are responding and adapting, reveals that a number of charities are cutting back on the number of staff they employ and the range of services they offer.
The report warns that this will also have implications for statutory children’s services, which benefit from the existence of a thriving local voluntary sector providing preventative services and information about local needs.
Just over a quarter said it was likely or very likely that they would be forced to close in the next 12 months.
In contrast, some charities revealed they were looking at more creative solutions, such as reviewing funding strategies to take advantage of alternative funding sources, building up volunteer capacity, developing mergers and forming social enterprises.
More than a third of respondents said they were giving more work to volunteers as a result of funding reductions, and just under one in five charities are joining together with other charities and organisations.
Other options that children’s charities were exploring included extending services into areas of greater need and training staff to take on new roles.
However, the consultation also highlighted significant barriers to taking these alternatives forward, with some charities having limited capacity to address the complexities of establishing consortiums and a lack of knowledge and experience of alternative business and funding models such as social enterprise and payment-by-results.
The report, which follows on from previous research carried out by the NCB last year entitled The Ripple Effect that looked into the nature and impact of the children’s and young people’s voluntary sector, makes a number of recommendations, including:
a robust analysis of spending on the children’s voluntary sector by central and local government, private business and charitable trusts, and a national survey of children’s and young people’s charities to access the impact of austerity measures on them and their service users.
the Office for Civil Society to facilitate the development of a coherent strategy for the children’s voluntary sector, working across government departments and with charity partners, with the aim of ensuring that charities can continue to deliver for children, young people and their families.
central Government to facilitate partners, including local government and major funders to develop outcome frameworks for a range of issues that affect children, with a view to providing a more consistent approach to assessing outcomes delivered by services and interventions.
Hilary Emery, chief executive of NCB, said, ‘Funding cuts of close to half a billion pounds is not good news for children and young people. And it’s not good news for a sector reeling from both the burden of an economic downturn, decreasing sources of public funding and increasing demands.
‘Shutting up shop is only a short-term answer to a long- term problem. While children’s charities themselves must be at the forefront of creating solutions, there is still a role for national government to put its weight behind the development of new partnerships and new ways of working.’