Feeling the heat of public sector cuts

By Matilda Macduff 2 August 2011

In my hometown, Aberystwyth, the council and police have responded to budget cuts by getting rid of the town’s only two traffic wardens, making parking a free-for-all for the next year. The local paper is having a field day, with weekly reports of ‘traffic chaos’ and road-rage-fuelled punch-ups, and the letters page is filled with debates around the pros and cons of self-regulation.

We are constantly bombarded with figures telling us how serious the cuts are, but sometimes it is individual stories, like this one, that really give these figures meaning.

The latest numbers doing the rounds relate to the impact of public sector cuts on charities. Anti-cuts group False Economy today published research showing that over 2,000 charities and community groups are facing budget cuts as local authorities withdraw grant funding. The research is based on hundreds of Freedom of Information requests made to local authorities between March and July this year. Charities facing cuts include 382 children’s and young people’s charities, 151 disability charities and 142 charities working with elderly people. The Guardian has mapped the geographical spread of the cuts on its data blog.

These figures give us a worrying snapshot of the financial impact of the cuts on hundreds of organisations. But the true extent of the cuts to charity budgets will prove to be far greater. False Economy says they are still waiting to hear back from several large councils, including Newcastle, Leeds, Manchester and Westminster. I’m not 100% clear whether the figures they have relate to grants from councils, so don’t take into account loss of income from government contracts, or whether contractual funding is included. So it could be even worse. And as local authority budgets shrink further over time, the situation could deteriorate.

We’ve talked a lot on this blog in the past year about the impact of cuts on charities. Nearly a quarter of charities in the UK receive government funding. 13% get over half their income from government, and some get more than 90%. In 2008/2009 total government funding to the voluntary sector was £12.8bn—a third of the sector’s income. Last year, NPC’s paper Preparing for cuts predicted that the sector’s income could fall by between £3.2bn and £5.1bn as a result of public spending cuts, far too big a hole for private philanthropy to fill.

Witnessing the effects of the recession on the ground, from traffic chaos to the closure of frontline charity services, makes these huge figures suddenly seem very real. Today’s report is worrying, but sadly for charities it is just the start. As the stories of cuts keep coming in, the numbers we hear shouted about in the press really start to hit home.