A new report from the charity outlines the challenges being faced.
A leading Scottish charity has warned of the effect the cost of living crisis is having on the country’s third sector.
In a new report, the ALLIANCE has said the crisis is impacting every aspect of the sector including funding, services and staffing, whilst deepening existing challenges.
Following their 2022 report on the impact of the cost of living crisis on individuals, Disabled people, unpaid carers and the cost of living crisis: Impacts, responses and long term solutions, the ALLIANCE have published a follow up - Stretched to the Limit: Scotland’s Third Sector and the cost of living crisis.
This piece of work brings together findings from a survey of the ALLIANCE’s organisational membership in the spring, a detailed case study from one of our members, and a workshop at our annual conference. Taken together, these paint a picture of a sector which is under intense stress, the charity said.
Amongst the findings of its survey were that 84% of member organisations responding had experienced increased demand for services, yet 61% reported reduction in funding via grants, 76% were facing higher bills, and 48% were unable to give their employees pay uplifts.
Despite these challenges the third sector continues to be a lifeline for many people across Scotland, responding flexibly to the changing needs of the people it supports.
With 88% of organisations saying that they would benefit from longer-term funding arrangements, and funding arising as the focus for discussion at our conference workshop, fair funding tops our list of recommendations
These include progressing commitments to fair funding for the third sector, in line with the SCVO definition.
The ALLIANCE also called for the Scottish Government to ensure the Fair Work agenda goes beyond funding the Real Living Wage, and instead to pay that is comparable to equivalent statutory sector roles.
The charity also underlined the need for tailored support for organisations operating in rural Scotland, targeted support for energy bills, and in the longer term lower energy tariff arrangements for the third sector, as well as the adoption of a human rights based approach to procurement and grant funding and the investment in services that reduce demand for acute interventions from the public and third sectors.
The report states: “The ongoing cost of living crisis continues to have a deep impact on people and organisations across Scotland. A previous report by the ALLIANCE had described some of the difficulties facing disabled people, people living with long term conditions and unpaid carers, including limitations on the right to food and to equal participation in society.
“These difficulties have been compounded as third sector organisations, which provide essential and irreplaceable support for people, have been facing their own challenges arising both directly from the cost-of-living crisis and from long term structural issues. By bringing together what the ALLIANCE heard through a membership survey, a conference workshop, and a detailed case study, this report offers a snapshot of the impacts of the crisis on our organisational members.
“Funding, which was already insecure and often failed to keep pace with rising costs, has further been eroded by inflation. Organisations are struggling to offer staff adequate pay rises, exacerbating difficulties with retention as staff seek better pay in the public or private sectors.
“Some services are being reduced, redesigned, or cut entirely, yet demand has increased significantly. In the most difficult cases, organisations have been forced to give up office space or make redundancies to make ends meet. Confidence is at a low, and there is a consensus that all levels of government need to do more to support the third sector.”