A “long-term decline” in funding from the government has left the charity sector vulnerable, the president of NCVO has told members of the House of Lords.
Baroness Delyth Morgan, who has served as president of the sector body since June and was chief executive of Breast Cancer Now, made the remarks yesterday during a debate on the importance of contributions of the charity and voluntary sector.
Revealing new figures from the NCVO’s upcoming UK Civil Society Almanac 2024, Morgan said that government funding accounted for 26% of the sector’s income in 2021-22, down from 30% the previous year.
Morgan said this decline formed part of a “long-term decline” of government funding into the sector, which she said she hoped was about to change.
‘Crisis upon crisis’ leaving sector struggling
Morgan revealed that there are now around 166,000 charities around the UK, according to the upcoming almanac, with eight out of 10 of these charities having annual incomes below £100,000.
From 2021-22, the sector contributed 1% of GDP to the British economy and generated £69.1bn, with the public contributing 48% to this through donations, legacies and trading in charity shops, she said.
The previous 2023 almanac highlighted that charity sector income overall had shrunk for the first time since 2013.
Morgan said that “crisis upon crisis” had left many charities struggling.
“More people than ever are turning to charities for the support that they cannot get elsewhere,” she said.
“According to the latest VCSE barometer from the Pro Bono Economics observatory, most charities expect demand to rise for their services. One in three charities do not expect to be able to meet this demand, which is very concerning.”
This is especially true for smaller charities, Morgan said, which are “heavily reliant on local government support – support that has been continuously cut over recent years”.
However, Morgan said she hoped for an improvement in the relationship between the charity sector and government, which she described as having become “truly strained in recent years”.
Discussing the planned Civil Society Covenant between the government and sector, helmed by NCVO and ACEVO, Morgan said the new initiative offers “a vital opportunity to redefine how we all work together” and “has a real chance to build meaningful, long-term partnerships for social change”.
