Earlier this week, the Scottish Government published its draft spending plans for the next three years. Faced with a 9.2% reduction in cash from Whitehall, it is an important moment for the future of Scotland and Scottish charities.

Comment on the plan has been subdued. Partly this is because there aren’t many surprises but also because the document is a whopping 262 pages (nearly 140 more than the UK’s equivalent this time last year). I’ve picked out three of the main points that affect charities:

  1. The central Third Sector budget sees a real terms reduction from £27.0m to £22.7m over the period, that is nearly 16%. This is vital to some but the vast majority of spending on charities doesn’t come out of this pot, it comes direct from local authorities. According to analysis by COSLA, which represents Scottish local authorities, overall their budgets are hit by 7%.
  2. OSCR the charity regulator, sees a fall in income from £3.3m to £3.0m. I think it already needs to do a lot more to make information about Scottish charities more accessible (try getting hold of a set of up-to-date charity accounts in Scotland) and this job is only made harder with less money. Quite a job for the new man at the helm.
  3. The government states that it wants a ‘decisive shift towards preventative spending’, whereby it focus resources on preventing social problems rather than dealing with crisis – echoing the recommendations of the recent Christie review on the future of public services.

It is last of these announcements that is perhaps most significant and offers the greatest opportunity to charities. It embodies a refreshingly long-term view, which may genuinely break the mould of governments’ tendency to look only as far as the next election. Interestingly, our analysis of the UK budget back in October 2010 warned of reductions to preventative services. As money becomes tight, we know from experience that budget holders tend to focus on crisis not prevention.

The Scottish Government seems to be keen to avoid this pitfall and has made its intentions clear by earmarking money for new funds to tackle drugs problems, support early years and help older people.  These announcements were welcomed by the Scottish Council for Voluntary Organisations, with the caveat that they doesn’t just mean that money is hijacked from other budgets.

This firm commitment to investment in preventative services is one that leaves UK government lagging behind. We now wait to see what difference these announcements will really make. Should the reality match the rhetoric then charities are likely to play an increasingly important part in public services in Scotland.

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