Children’s charities face ‘perfect storms’

Nick Davies is a Policy Manager at the Charity Children England.

Although talk of the ‘Big Society’ has been somewhat quiet of late, charities are still central to the Coalition’s vision for open public services and play a vital role in supporting vulnerable children and families, particularly at a time of recession and public spending cuts. However, a new report by Children England highlights the extremely precarious position that many charities and local areas find themselves in.

Perfect Storms: An analysis of the operating conditions for the children, young people and families voluntary sector for the first time models and provides case studies showing the cumulative impact of the financial crisis and subsequent austerity measures on children’s charities and their statutory partners. It describes two worrying and interrelated ‘perfect storms’ affecting the voluntary and public sectors, and those they support.

Business storm


The first storm threatens the sustainability of charities’ business models. Whilst individual giving has remained static, the financial crisis reduced returns from investments, social enterprise income has fallen and the deep public sector funding cuts have increased competition for the grants made by trusts, foundations and the national lottery. At the same time, the cost of fundraising has risen, inflation has remained high, utility bills have skyrocketed and, most importantly, demand for services, both in the number of people seeking support and the severity of their problems, has increased dramatically. As a result, staff and volunteer numbers have fallen, reducing service capacity, while those remaining in post are increasingly suffering from burnout.

Locality storm

The second storm shows how these pressures on charitable services interact with the children’s social services provided by local authorities. With both sectors experiencing higher costs, reduced funding and increased demand concurrently, local support arrangements are starting to break down, threatening the wellbeing of some of the country’s most vulnerable children, young people and families. With many services rationing the support that they provide, principally through waiting lists and raised access thresholds, and others closing altogether, people in need are being pushed towards inappropriate support. Similarly, both charity and public sector services have been forced to focus on crisis support at the expense of early intervention, potentially storing up further trouble for the future.

Next steps

Throughout our interviews with voluntary and community sector and statutory bodies, it should be emphasised that there was a high degree of realism and honesty in acknowledging that some of the challenges they face currently are:

a)      Inevitable. In the sense of charities sharing in society’s wider economic problems and suffering from factors beyond the control of local and even national policy makers (e.g. asset value losses)

b)      Unintentional. It is in the nature of these storms that impacts from any single point of decision-making in the system will then combine with forces beyond the immediate ‘line of sight’, direct responsibility or awareness of the person making that decision, to create unintended and exponential consequences for front line organisations, sometimes several stages along the ‘food chain’

 c)       Deep-rooted and pre-dating the economic downturn. Although the financial crisis and subsequent austerity measures have certainly exacerbated the situation, systemic issues, such as those related to public sector commissioning, were evident well before the crash

With so many contributory factors, there is no neat list of solutions that can be quickly implemented to resolve these issues. Such systemic problems also require systemic solutions. We are therefore calling on experts from across the public, private and voluntary sectors to share their thoughts on the following themes arising from the report:

  • Children and families’ changing needs and vulnerabilities
  • The role of charities
  • Public finance and the transfer of risk
  • The reconfiguration and localisation of public services
  • The voluntary sector workforce

All thoughts, comments, criticisms and suggestions are very welcome and should be sent to nick@childrenengland.org.uk by 12 November 2012.

 

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One Response to “Children’s charities face ‘perfect storms’”

  1. woolfiesmiff

    As the voluntary and unpaid CEO of a small children’s charity and also a successful businessman there is nothing in this report that isn’t and hasn’t always been faced by any organisation. You can’t have your cake and eat it. Too many people want “free” mortgages and low cost borrowing, especially politicians, in order to have that, no savings returns are possible without very high risk. Maybe just maybe it would help if the left gained some basic common sense about public spending rather than the totally pathetic austerity schtick. Stop wasting billions , stop spending public money on non critical areas. As a businessman I’m offered free loans, 1,000’s of pounds for broadband, R&D, solar energy, electric vehicles, apprenticeship schemes etc etc. This is outrageous. Taxpayers money should be spent on core services. Those core social and welfare services would then be better able to work in partnership with REAL charities. There are far too many super charities that are just political pressure groups and provide next to nothing for their supposed client groups. The left bang on and on about tax avoidance , the biggest source of so called tax avoidance? Oh yeh charitable donations. This is an example of unintended consequences .

    Charities are businesses and should be run like one. The only difference is they don’t pay tax on their profits ( lots of charities make huge profits) or distribute dividends to shareholders.

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