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Survey highlights Government funding cuts to voluntary organisations

Published 04/07/2016

The survey also found that one in four groups felt vulnerable to cash flow issues
The survey also found that one in four groups felt vulnerable to cash flow issues

Social enterprises, charities and community groups are having to cope with significant cuts in Government funding, new figures show.

Almost a third (29%) of voluntary organisations have endured reductions during the last three months, and although a further 59% said they experienced no change, this equates in real terms to a decline, the Ulster Bank and CO3 Third Sector Index said.

The survey, which tracks quarterly changes, also found that one in four groups felt vulnerable to cash flow issues while one in five said their bank balance had worsened since March.

Despite the financial challenges, two-thirds (65%) of those questioned said their organisation has seen an increase in demand and one quarter (23%) said they had increased headcount.

Ulster Bank chief economist Northern Ireland, Richard Ramsey, said the figures suggest that many third sector bodies are adapting well to the new funding reality.

He said: "The challenging environment and the impact on some organisations is clear to see. But many organisations are actually seeing demand for their services grow and are able to increase their headcount. Some of the rising demand is no doubt being driven by need, resulting from, for instance, public sector cuts and inquiries about changes to the benefit system.

"However, there are also organisations who are becoming increasingly entrepreneurial, diversifying their service offering, and entering new markets. The challenge for the sector as a whole is to continue to adapt and to find new streams of revenue.

"This is particularly the case with a question mark now hanging over EU funding in the future. Three-quarters of respondents had previously identified the referendum as something that concerned them, and with a Leave vote having come to pass, there is now a real need for third sector leaders to envisage and contingency plan for a future without EU cash."

CO3 represents some 500 members which represent organisations with an annual income of over £100,000.

Chief executive Nora Smith said: "Cuts in Government funding, cashflow concerns and an increase in demand for services all point to a challenging environment for third sector leaders.

"Subsequently, Brexit compounds this uncertainty, and our engagement with our members tells us that the significant majority see it as a negative thing for their organisation.

"Whilst there is an understandable concern of the unknown, we are a resilient and dynamic sector, used to dealing with challenge, change and uncertainty. Moving forward it is central that we work in partnership with our political leaders and the Northern Ireland Executive to ensure that the services and work provided by our sector are protected."

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