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The most optimistic scenario for the voluntary sector in the next public spending round is overall funding cuts of “hundreds of millions if not billions”, whichever party gets into power, according to a new report produced by CFDG.

And the worst-case scenario will see “billions of cuts” from an annual funding stream of £11bn, the authors say.

The report, Public Funding Cuts in the Third Sector: Scale and Implications, written by Liberal Democrat researcher Antonis Papasolomontos and CFDG’s policy and campaigns officer Kate Hand, summarises the current situation regarding Britain's budget deficit and looks at how the sector might be affected by various scenarios of spending cuts.

It states that whoever forms the next government, public funding to the sector is likely to “fall dramatically” from its current total of £11-12bn, which presently comprises around 35 per cent of charities’ total income.

Around half of this funding is in the form of grants; the other half comes from contracts with local government and central government departments.  The vast majority of departments, including the Office of the Third Sector, are facing cuts of at least 3 per cent and potentially much more, and local authority budgets are fixed until 2010/11 but are already under pressure.

While both main parties have pledged to preserve the health and international aid budgets – and Labour has extended this promise to education and defence – both also want to reduce Britain’s fiscal deficit from 11.9 per cent of GDP to 1.3 per cent by 2018....article continues here

Source: Civil Society