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Charities face £3 billion cuts

Charities in the UK are set to lose £2.8bn over the spending review period from 2011-2015, a new report suggests.

By 2015-16, the sector will be losing £911m per year, according to the report, ‘Counting the Cuts’, by the National Council for Voluntary Organisations (NCVO), which analysed the Government’s projected spending plans in detail.

The impact of the cuts will be felt unevenly across the sector, with some charities facing more cuts than others, the report suggests. Research last week by anti-cuts campaign group False Economy, which is aligned with the TUC, suggested that 2,000 charities are already having their funding cut by local authorities.

Karl Wilding, head of policy and research at NCVO, said: “Putting an authoritative figure on the extent of the cuts to date has been like trying to pin jelly to the wall. Estimates have varied widely and this report provides a solid baseline figure based on the Government’s own figures.

“Many charities are unwilling to speak out for fear they will jeopardise other funding streams but we currently face the perfect storm of an increase in demand and nearly £3bn public sector cuts – this is a significant cause for concern because it will significantly hamper the ability of charities to support those most in need.”

The review also published seven ‘deadly myths’ concerning the relationship between charities and the Government. It states that government-funded charities also do important work, and most do not live off government ‘handouts’.

Wilding said: “Alongside the weight of the challenging economic climate and the impact of spending cuts, charities have to contend with misinformation and myths which threaten to undermine the high levels of confidence in our sector.”

Shadow Cabinet Office minister Tessa Jowell said: “What is becoming apparent is the scale of the cuts that charities are facing across the country, which are beginning to undermine the very building blocks of community life.

“Soaring speeches on the Big Society will ring hollow when the people responsible for it are being made redundant. It beggars belief that the Tory-led government still do not have a complete picture of the impact that their actions will have.
She called for a “thorough and comprehensive review” into the impact of the Government’s tax and spending plans for charities and local voluntary organisations before the Commons returns from its summer break in September.

A Cabinet Office spokesman responded: "Big Society offers the voluntary sector many new opportunities to grow. Our reforms will allow the voluntary sector to bid for public service contracts worth billions of pounds. Just last week Big Society Capital launched with an expected £600m to give the sector access to much-needed finance, which will help them expand and bid for these new contracts.
"And we're doing more to support giving and philanthropy including measures in the Budget estimated to be worth £600m over the lifetime of the Parliament. Parts of the sector are already thriving, this week Social Enterprise UK reported their sector had stronger growth than mainstream business.
"Getting public spending under control is as important for charities as it is for every other part of society. But we are supporting them, already over 1,000 organisations which are vulnerable to public spending cuts have been awarded funding from our £107m Transition Fund."

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