Hot Topic: Funding Cuts

Funding Cuts: the issue

Care and support budgets in Scotland's third sector continue to be affected by budget cuts - radically in many cases - threatening services and jobs in many local authority areas. Earlier this year, providers reported across-the-board cuts of between 4% and 20% are being imposed by a range of local authorities across the country.

CCPS is concerned that these cuts take no account of the significant reductions in operating costs already made by third sector providers in recent years, in respect both of efficiency savings and of difficult decisions about staff pay, terms and conditions. Neither do they take account of the consistently higher quality of care and support provided by the third sector, as demonstrated by inspection reports and gradings awarded by the national regulatory body, SCSWIS.

Strathclyde University research commissioned by the CCPS-hosted Workforce Unit, highlights the widespread job losses, pay freezes and reductions in terms and conditions for staff within the voluntary sector as a result of reduced or standstill funding and increased competitive tendering for care services in recent years. For the full report, see link in the right-hand column.

CCPS wrote to the Herald in early February 2011 to highlight the damage that disproportionate and indiscriminate cuts are likely to bring about: it has also written to local authorities, urging them to protect high quality third sector services that achieve good outcomes for people and operate efficiently, rather than rush into 'panic' cuts that take no account of quality or value for money.

In keeping with last year’s budget, the Scottish Budget 2012-13, announced by the Finance Secretary John Swinney on 21 September 2011, again offers a deal to Scotland's councils, agreeing to limit cuts in local authority spending (this year by 3.03%) to those local authorities who continue the council tax freeze for a fifth year.

As part of the Government’s programme for reforming public services (Christie Commission response), and the focus on preventative spend, local authorities are being asked to focus on greater partnership working and integration of services. Three new change funds were announced in the budget, providing up to £500 million to support this process of reform. For more information on the Scottish draft Budget and Christie Commission response, please follow this link to a CCPS Briefing on the Scottish Budget 2012-13.

Mapping the Cuts

From April 2011, The Guardian newspaper have started to track public sector cuts across the UK (including Scotland). To view this map, please follow this link.

A new website - Voluntary Sector Cuts - is also tracking cuts to voluntary and community organisations across England and Wales. They are also starting to add information from Scotland.

CCPS is also mapping cuts within its own membership through its regular provider optimism survey (see below), and is keeping a watching brief on this issue.

Latest News

Latest survey reveals early effect of cuts to voluntary sector care provision

The latest CCPS Provider Optimism Survey (May 2011) reveals the extent of current financial pressures on voluntary sector providers. Over the last three months:

44% of providers responding to the survey report a downturn in business/turnover
58% report that the number of staff in employment have gone down
47% report a decrease in operating surpluses.

Meanwhile 93% of survey respondents have been notified of budget cuts to services in at least one Scottish local authority area for 2011/12, while 78% of respondents have experienced cuts in multiple areas. The survey findings will be disseminated to a wide range of stakeholders, including key policy and decision makers.

New research reveals impact of funding constraints on workforce terms and conditions in the voluntary sector

There are now no remaining elements of public sector pay and conditions universally available to social care staff in the voluntary sector, according to new research from the University of Strathclyde, even though voluntary organisations provide more than a third of Scotland’s publicly-funded registered care services.

The research, conducted by Dr Ian Cunningham of the Department of Human Resource Management, and commissioned by the Voluntary Sector Social Services Workforce Unit, highlights the radical measures that organisations have had to take in order to remain in operation as providers of care and support.

In the last three years:

79% of voluntary sector care organisations have been unable to award a cost of living rise to staff equivalent to the increases paid to the public sector workforce 57% have implemented pay freezes
44% have made redundancies to frontline staff, and 55% have lost line managers
60% have made cuts to training budgets
73% report that they are increasingly having to raid organisational reserves in order to maintain services
Only 15% retain any link with public sector pension arrangements.

Pay scales and conditions of service in the voluntary sector used to be broadly equivalent to public sector terms and conditions, but intense and sustained pressure to cut costs has meant that very few voluntary care organisations now retain any link with public sector conditions of service. The research warns that the quality and sustainability of care services in the sector is being put at risk as a result.

Campaign for a Fair Society

CCPS has added its name to the 'Campaign for a Fair Society', a UK-wide initiative launched on 8 February protesting about the impact of cuts on disabled people.
The campaign is highlighting a range of cuts affecting disabled people:

Reductions in local authority budgets leading to reductions in funding to all local authority funded care and support services.
The closure of the Independent Living Fund (ILF) which will affect 21,000 of the most severely disabled people and may prevent many from continuing to live independently in the community.
Changes to Support for Mortgage Interest benefit that effectively rule out shared home ownership for disabled people.
A threat to the mobility component of Disability Living Allowance (DLA) for people in residential care, which helps meet some of the cost of things such as electric wheelchairs, mobility aids and taxis where there is no accessible public transport, and without which many people could be isolated.