Research showing importance of charities in delivering services prompts 'no soft target' warning from sector leaders

New research revealing the importance of voluntary organisations in delivering services has prompted charity leaders to warn they should not be seen as a soft target for public sector spending cuts.

Comprehensive data published today (21/4/10) by the National Council for Voluntary Organisations shows the voluntary sector’s earned income from delivering statutory contracts has increased to £9.1bn, up 128% since 2000/01.

Charities provide essential public services, such as meals on wheels and refuges for victims of domestic violence through to sports activities for disadvantaged children and support and advice for people looking for work.

Stuart Etherington, NCVO’s chief executive, said:

“Central and local governments have rightly recognised and made greater use of the voluntary sector’s knowledge and expertise, particularly at a grassroots level.

“We know there will be severe cuts in public spending in the coming months. But we should not be seen as a cheap or fluffy addition to core public services. Our work is with some of the most vulnerable and disadvantaged people and communities in the country, and they stand to lose the most if vital services are cut.

NCVO’s new data, published in its annual UK Civil Society Almanac, shows government spending on the voluntary sector accounts for two per cent of the overall national budget.

However, it also shows that three-quarters (133,074 organisations or 78%) of charities receive no government funding at all and that income from individuals remains the single most important funding stream for the entire voluntary sector, accounting for £13.1 billion (37%) of its total £35.5 billion annual income.

A total of 38,000 charities (22%) do receive government money and of those, 23,000 receive more than half their funding in this way (13% of all charities).

Organisations that provide employment and training opportunities receive the largest proportion of their income from government, receiving nearly three-quarters (70%) of their funding from statutory sources. Other sub-sectors that receive a substantial proportion of income from government include education (51%), law and advocacy (51%), social services (50%) and housing (50%).

Larger charities are also more likely to receive a greater proportion of their income from statutory sources. Large charities, with an income of between £1m and £10m and which represent 2.4% of the sector, receive 38% of their income from government.

By contrast, micro charities, with an income of less than £10,000 and which represent 53.2% of the sector, receive just five per cent of income from government.

Other findings include:

• UK 'civil society' organisations employ an estimated 1.6 million people, which represents 5.6% of the total UK workforce, and is a similar size to the NHS, which employs 1.4 million people. ('Civil society' includes voluntary organisations as well as other groups such as universities, housing associations and faith groups)
• Voluntary organisations employ 668,000 people and account for one third (32%) of the civil society workforce. This equates to two people in every hundred in the total UK workforce.
• Between 1999 and 2008 the voluntary sector workforce increased by 23% (124,000 people). The public sector grew by 18% and the private by seven% in this period.
• More people with degrees work in the voluntary sector (38% have a degree) than the public (37%) or private (19%) sectors.

For more information and to see a full copy of NCVO’s The UK Civil Society Almanac 2010 contact Jenny Legg in NCVO’s press office on 020 7520 2469 or email: jenny.legg@ncvo-vol.org.uk. For calls outside office hours, ring 07714 243942.

Notes to editors:

Financial information in The UK Civil Society Almanac 2010 is based on figures from the 2007/08 financial year and shows the sector was in a sound financial position as it entered the recession. Next year’s Almanac will reflect the sector’s situation during the worst of the recession.

The Almanac is free to all full NCVO members. Other organisations can purchase a copy via the website: www.ncvo-vol.org.uk/almanac

The National Council for Voluntary Organisations (NCVO) www.ncvo-vol.org.uk is the umbrella body for the voluntary sector in England, with sister councils in Wales, Scotland and Northern Ireland. NCVO has more than 7,500 members, ranging from large national bodies to community groups, volunteer centres, and development agencies working at a local level. With over 280,000 staff and more than 13 million volunteers working for our members, we represent and support almost half the voluntary sector workforce.