Since coming to power in May 2010, the Coalition Government's first priority has been to tackle the UK's budget deficit. Implementing spending cuts of around £20 billion between 2010 and 2015, this agenda is affecting all sectors of the economy and society - including the voluntary sector and its beneficiaries.
The cuts are being implemented unevenly, and in some areas are disproportionately affecting the voluntary sector. Even in areas that are highly supportive of the voluntary sector, the trend of increasing investment from the state has gone, possibly permanently. Meanwhile, VAT has been raised – considerably increasing the voluntary sector’s cost base – and transitional relief on Gift Aid has been ended.
In cash-strapped times, voluntary organisations have also been hit by a fall in giving. This dropped by around 10% during the recession and has still not fully recovered. And the sector is limited in terms of the investment and trading activities it can pursue to become more financially resilient and sustainable.
Yet, as a consequence of double-dip recession, high unemployment and slow economic growth, there is a growing demand for the services offered by the voluntary sector.
All this adds up to a period of considerable challenge for the sector. Some government departments and local authorities are making particular efforts to protect voluntary organisations, because of the economic and social value they add. There are also new opportunities for some voluntary organisations to get involved in public service delivery. But for the majority of the sector, these new opportunities still feel far from reach, at a time of escalating demand.
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