How local authorities are really managing budget cuts

Last October’s announcement of large scale cuts to public spending left voluntary sector organisations (VCOs) awaiting confirmation of how their funding would be affected. As the majority of their statutory funding is channelled through local government, at the time of the Spending Review, we at NCVO said that it was likely that some organisations would come under significant pressure. To try and alleviate such a strain on the sector, NCVO pushed for the adoption of good practice by councils and urged local authorities not to pass on disproportionate cuts to VCOs.

To this end, we wrote a joint letter with ACEVO and NAVCA addressed to all local authorities. As well as the request for good practice, it asked them to talk to VCOs at an early stage and to also indicate if cuts had been met with positive action. In a matter of weeks we received 94 responses, which equates to around 27% of both district and county councils. In line with one of NCVO’s core beliefs that local authorities are often best placed to make decisions about their local area, we were encouraged to see that the stream of responses had an overwhelmingly positive tone. Yes, difficult decisions had been taken and no, there won’t be as much money as before; but the innovative approach that councils have already started to take in the face of deep and speedy budget cuts does seem to offer a glimmer of light at the end of the deficit tunnel.

To support this optimistic statement, a few top-line results might be of interest here. Of the 94 authorities that responded:
• 45% said that they were protecting their VCS budgets for 2010/11 and
• A further 6% indicated that they have actually increased their budgets for the sector.
In line with the Compact, 3 months seemed to be the accepted minimum notice period and 14% of councils said that they planned to give 6, 12 or even 18 months notice.

Perhaps the responses of most interest were those that detailed new initiatives and partnerships, which have been formulated to ease the impact of the cuts:

• An impressive 84% of local authorities outlined how they already work in partnership with their local VCS, through VCS forums or through more official channels, such as Local Strategic Partnerships;
• 50% of councils outlined new initiatives that they have put in place to help VCOs at this uncertain time and
• A simple measure taken by 12% of authorities has been to offer ‘in-kind’ support to their local VCS, such as sharing offices and ICT resources.

In terms of new initiatives:

• 30% of local authorities created New Grant Funds, One-off Grants or Transition Funds to help VCOs adapt to the shift in funding arrangements;
• A further 10% established new projects to support engagement in their area, such as think tanks, participatory budgeting, active community projects and county-specific Big Society agendas.

Regrettably, difficulties were mentioned by 16% of the respondents, which tended to centre on the often incongruous nature of central and local government funding arrangements. Admittedly this statistic may be much larger if the councils that are yet to reply to our letter are taken into consideration.

However, to end on a more positive note, what these results clearly indicate is that councils have had the foresight to anticipate and prepare for the cuts. In the cases where VCS budgets have unfortunately not been protected, local authorities have detailed how they are supporting the sector in more innovative ways. Almost all of these councils have assured us that disproportionate cuts have not been passed onto voluntary organisations.

This snapshot of how cuts at central government have been carefully handled by local authorities shows both the resilience of local decision-makers and the value that they attribute to the voluntary sector. This relationship is perhaps more vital than ever now that the implications of the Government’s Big Society agenda are beginning to take shape.

A full report on these findings is to follow. In the meantime, if you would like to discuss any of these results further, please contact Charlotte Stuffins on 020 7520 2412 or email charlotte.stuffins@ncvo-vol.org.uk.

Charlotte Stuffins