Scottish Charities need a Hardship Fund too.
As MSPs picked over the range of implications for Scotland of the UK Budget at Holyrood on Thursday, Labour Finance spokesperson Andy Kerr called for the various allocations of new money which will lead to extra cash north of the border to be spent in a similar fashion here. John Swinney indicated that Scottish Ministers would consider these and report back to Parliament. Aberlour, the Scottish Council of Voluntary Organisations and many others now call on him to give Scottish charities a similar lifeline to the £20 Million hardship fund offered to the English third sector by the chancellor in last weeks budget.
The global recession has touched all aspects of Scottish life and the voluntary sector is no exception. Long before the credit bubble burst, Scottish charities were facing a range of funding difficulties such as the decline in corporate and personal giving, new competition for lottery funding from the Olympics and a the impact of changes in government funding of Local Authorities with the removal of ring fenced government support to specific causes. The financial situation has only served to make matters worse and it’s the smaller community based charities and groups which are suffering most.
In a lot of ways the recession represents a ‘perfect storm’ for Scottish charities. On the one hand revenue sources are drying up as companies cut back on charitable giving to maintain margins, whilst on the other a jump in unemployment has brought with it a rise in poverty and associated social problems such as drug and alcohol misuse, depression and homelessness. These are key drivers in demand for the services that many Scottish charities provide. As such many organisations are stretched to breaking point with staff steadfastly working to alleviate the hardship of others whilst living under a very real prospect of redundancy due to contraction or collapse in their own organisation.
Budget 2009 recognised this problem and answered it with a £20million one off hardship fund designed by the treasury to offer grant funding support to cash strapped English charities who are demonstrably suffering as a result of falling revenues and increased demand brought about by the financial crisis. The fund is to be disbursed throughout 2009/10 and could make the vital difference between survival and extinction to those organisations and groups operating on the front line of the recession.
As the English hardship fund represents new money, devolution rules dictate that Scotland will see an allocation of cash through the Barnett formula which could total over £2 million. It is up to Scottish Ministers to decide how that money is spent. Agreeing to set up a similar fund here would give Scottish decision makers the opportunity to send a strong message of support to countless voluntary sector workers, toiling to alleviate the social impact of the melt down.
£2 million will not end the crisis currently faced by charities, it represents less than 0.1% of the total annual turnover of the third sector in Scotland. It could however give those at the very sharpest end a vital toe hold that may sustain them long enough to find other means of securing their future and paying hard working staff. At the very least it would provide a much needed ray of hope to charities struggling to make ends meet in otherwise gloomy economic times.
A decision by Scottish ministers to replicate the hardship fund here could go someway to making the difference between charity workers across the country continuing to lessen the impact of the recession or finding themselves among the ranks of the many thousands of Scots they seek to help.
Alex Cole-Hamilton is Head of Policy for Aberlour Childcare Trust and sits on the management board and policy committee of the Scottish Council of Voluntary Organisations.
Alex Cole-Hamilton
Head of Policy
Aberlour, the Scottish Children’s charity.