Voluntary Organisations Network North East (Vonne) has warned that public service contracts have failed to plug the gap left by cuts to grant funding, with charities trying to do more with less, as it publishes the latest survey of members.

Vonne has now called on the government to move away from large-scale contracts and encourage more local commissioning. 

The umbrella body published its sixth Surviving or Thriving report yesterday, and of the 200 voluntary groups that responded two-thirds said that demand for their services had risen while 59 per cent had experienced a decrease in funding. One-third had lost staff.

A quarter of those surveyed also said that they may close in the next 12 months (the same as in the last survey) and the report also lists 20 organisations in the area that have closed since the last report 18 months ago.

Jo Curry (pictured), chief executive of Vonne, said: “Charities and community groups have become reliant on using reserves that in many cases no longer exist. The anticipated opening up of public service contracts is failing to take off in a way that fills the gaps left by cuts in grant income.”

More than half (56 per cent) are using reserves, down slightly from the previous survey, while the percentage of respondents saying that they had no reserves increased from 16 per cent to 23 per cent this time around.