A survey of charities in the the North East of England has found that almost three-quarters have seen a decrease in funding in the last six months.

At the same time, 59 per cent of the 120 respondents said that they had experienced an increase in demand for their services, according to Voluntary Organisations Network North East (VONNE).

The report, Surviving or Thriving, also found that almost half were considering closing a service while 23 per cent said they may close in the next year. It concludes that many organisations “are now in a very fragile state”.

Angela Oxbury, chief executive of Women’s Health Service in South Tyneside, which had its funding cut by 30 per cent this year, said: “We’ve had to stop delivering as much already.”

She added: “It’s a snowballing situation; we lose out, which means the people we help lose out, which simply means more problems in the long-term.”

This was the fifth survey carried out by VONNE with Newcastle Council for Voluntary Service and looking at the impact of the economic downturn on organisations in the North East.

Almost 65 per cent of charities surveyed said that they were using their reserves. Between November 2009 and December 2010 this figure had been just under 45 per cent in and in May 2009 it was 15 per cent.

Recommendations

The report recommends that local authorities ensure that they engage with sector organisations at an early stage and carry out impact assessments of proposed cuts. It also calls on the government to consider extending the Transition Fund beyond 2011.

It cautions against the increase in payment by results contracts being offered to voluntary sector organisations providing public services, claiming that small and medium-sized organisations cannot compete with larger organisations. 

VONNE has more than 600 members and has funding from the Millfield House foundation to continue the six monthly survey until 2013.