NAVCA is monitoring the impact of local authorities’ ongoing financial crisis on the voluntary, community and social enterprise (VCSE) sector as more are finding themselves in financial distress.
The umbrella body told Civil Society that it is aware of some councils who have issued a section 114 notice and the potential risk for others to follow suit and is looking at how this could affect voluntary organisations.
In September, Birmingham City Council, Europe’s largest local authority, issued such notice stating that it had insufficient resources to meet its expenditure commitments from its income and must stop all new spending except vital and statutory services.
In response, Birmingham Voluntary Service Council (VSC) advised voluntary organisations “to review future income streams and any council-funded work that’s in the pipeline, in order to model and plan for different eventualities”.
NAVCA: ‘We’re monitoring the situation’
NAVCA said that it is “aware of the small number of section 114 notices issued to date and the potential risk for other councils of needing to issue a section 114 notice”.
“We’re monitoring the situation and working with members in affected areas to gauge the impact on the wider VCSE sector,” a spokesperson said.
“We agree with the advice from NAVCA member Birmingham VSC for VCSE organisations to review future funding streams, including from council-funded work, in order to plan for the future, and to talk to their council commissioner if they have any concerns.”
CCVS: ‘Local groups need to diversify their income’
Speaking at a Lib Dems party conference fringe event in September, councillor Lucy Nethsingha told attendees that Cambridgeshire County Council will have a deficit of £24m for the coming year, the equivalent of about 2.3% of its budget.
Mark Freeman, chief executive officer of Cambridge Council for Voluntary Service (CCVS), told Civil Society that as a local support organisation in Cambridgeshire, CCVS recognises “the stress that has been put on the budgets of all our local councils including Cambridgeshire County Council”.
He said: “The rising costs and diminishing central government grants have had an impact everywhere. Despite this, we’re seeing continued support from our local councils for the work that local charities and community groups do in our communities.
“Whenever we work with local groups, we stress the need for them to diversify their income so that they’re less susceptible to any loss of funding. Whilst we would love our councils to be in a position to increase the money they have to fund the sector, we recognise this isn’t a statutory part of their work and that cuts are always possible.”
Freeman said that at the moment, there is “no reason to be concerned about funding cuts from Cambridgeshire County Council”.
“It’s time the work that councils do to support the invaluable contribution made by local community groups is recognised at the highest levels of government. We would call for increased funding for local councils so that they could provide more long-term core funding to the groups working in their local communities.”
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