Charity sector hit by tightening council budgets

Data from the National Council for Voluntary Organisations (NCVO) has revealed that local government cuts have hit charities with research showing the charitable sector can expect to see ‘little rise’ in government income.

Statistics from the National Council for Voluntary Organisations (NCVO) found that the charity sector overall saw modest growth, with total income rising to £45.5 billionn in 2014/15 from £44.3 billion in 2013/14.

Figures indicated that while government funding increased around one per cent overall to £15.3 billion, the NCVO found income from local government, both in contracts and grants, continued to decline from its 2010 level, as local authorities tightened their spending.

The group called for forthcoming money from dormant assets to be used to capitalise small charities in order to ‘give them a leg up with earning income’.

Sir Stuart Etherington, chief executive of NCVO, said: “Charities have been becoming increasingly entrepreneurial in recent times. With no realistic prospect of an overall increase in government spending and what look to be tough public fundraising conditions, this is a trend that will have to continue if the sector is to see growth in the next few years.

“While some charities will doubtless buck these trends the picture for small and medium charities in particular looks challenging.

“The next government could boost local charities and community groups for a generation by using the money from dormant assets to endow community foundations with investment that can generate returns to support charities for a generation to come.

“They could also help communities buy assets that are important to them, putting them under the control of local people through charities and community groups.”

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