Political instability impacts on third sector cash and skill flow
Cash flow pressures, recruitment difficulties and uncertainty linked to Northern Ireland’s political situation are impacting the third sector’s ability to deliver key services, according to a report today.
The Ulster Bank and CO3 3rd Sector Index revealed that 86% of third sector leaders said that the lack of a Northern Ireland Executive and Assembly has had a negative impact on their organisation, including funding uncertainty.
That was up 9% on the quarter before.
The index is a key barometer of Northern Ireland’s third sector, involving a quarterly survey of CO3 members of some of Northern Ireland’s largest charities and social enterprises.
The latest index also showed cashflow pressures in the sector during the first quarter of the year, with more than one-third of leaders saying that their organisation’s cashflow position is now unstable, up from 17% in the last quarter of 2017.
And 37% of respondents said their organisation is experiencing difficulty recruiting the right skills in areas such as social care, fundraising, finance and administration.
Anecdotal evidence suggests that funding uncertainty due to an absence of decision-making at Stormont means potential candidates are generally opting for more secure employment.
But it wasn’t all gloom from the survey as the report revealed slight positivity as 40% of third sector leaders believe their organisation’s turnover will increase in the next 12 months, as demand for the sector’s services increases.
Nora Smith, chief executive of CO3, said: “We can see from this quarter’s results the influence the lack of a local government is having.
“Late and short-term budgetary decisions have impacted on cash flow, and this, in turn, affects the sector’s ability to plan and deliver key services. The nature of funding has undoubtedly impacted on staff morale, for those on short-term contracts and for those on notice, it inhibits the ability to recruit and retain key staff members.
“It is a challenging time, yet the resilience of the sector shines through with a high proportion of respondents stating their turnover will increase over the course of the next 12 months.
“The recent media coverage mainly focused on Oxfam serves to remind us that public trust is our most treasured asset and that strong leadership and governance must be at the centre of the third sector.”
Richard Ramsey, NI chief economist at Ulster Bank, said: “Overall, the Northern Ireland economy enjoyed a stronger first quarter of 2018 than many would have expected, and this is evident in the labour market, where we are seeing record employment and low unemployment.
“Conversely difficulties in the third sector appear to have intensified during this time, and the two things are perhaps not entirely unrelated.
“A significant number of job openings in the private sector mean that competition for candidates is intense, and with the private sector perhaps offering the prospect of greater job security, this is making it difficult for third sector organisations to recruit, therefore impacting on their ability to deliver services.
“Until there is greater certainty around longer-term funding for the third sector, it is hard to see these issues easing.”
He added that skill shortages in Northern Ireland, “exacerbated by the strong performance of other economies and the current weakness of sterling” are pushing migrant labour elsewhere.