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The voice of Scotland’s vibrant voluntary sector

Published by Scottish Council for Voluntary Organisations

TFN is published by the Scottish Council for Voluntary Organisations, Mansfield Traquair Centre, 15 Mansfield Place, Edinburgh, EH3 6BB. The Scottish Council for Voluntary Organisations (SCVO) is a Scottish Charitable Incorporated Organisation. Registration number SC003558.

Capital's third sector faces closures as council plans to slash budgets

This news post is over 1 year old

The local authority has published savings proposals for the next financial year

Multi-million pound funding cuts proposed by City of Edinburgh Council could hit the capital’s third sector hard, as voluntary organisations warn the future of organisations could be put at risk. 

Earlier this week a report proposing savings across local public services was published by the council, including massive savings in education - some of which will affect the funding of voluntary organisations. 

In a paper to be considered by the council’s Finance and Resources Committee on Tuesday, 7 February, officials warn that the council is facing a £76 million black hole in its finances. 

The proposals include claims that around £1.1m could be saved by April 2025 if councillors agree to carry out a review “services purchased from partners, along with grants paid to third sector organisations” to “ensure that Best Value is achieved and that areas of duplication are minimised.”

The report notes that there would be an impact on “Statutory Partner Agencies and Third Sector organisations and their staff; children, young people and families living in communities across Edinburgh who benefit from accessing these services”. Despite this, no mitigating action is offered. 

A further proposal to review inclusion and support services would also hit the city’s third sector and those using their services. 

The council has suggested that £4.4m could be saved by April 2028 by reviewing “some external funding to third sector partners” to “ensure better, strategic use is made of Pupil Equity and Strategic Equity funding”.

This item notes a concern about potential risk of “legal and reputational impact to the council” if it fails to meet statutory requirements as a result of this cut. 

Those representing third sector organisations in the city have hit out at the proposals, warning that the proposals could “ultimately result in the closure of services that are embedded at the heart of communities”. 

Bridie Ashrowan, chief executive of Third Sector Interface Edinburgh Voluntary Organisations' Council (EVOC), told TFN: “At the heart of any discussion about cuts to public services, and specifically to the community and voluntary sector, is what the loss of this support really means to people, families and communities. This is particularly true at a time when many are already struggling.

“The community and voluntary sector play a vital role in making sure that the right support is available to people in the places they live and any loss of investment in these groups and organisations will inevitably result in less early intervention and prevention. 

“Cuts in early intervention and this sector frequently result in costs being passed on to other areas of the Council’s core budget - where a family is made homeless or a child goes into high cost out-of-area care. 

“These are often preventable outcomes, and the trust that families have in community-based staff and volunteers can result in people getting help when needed and within their own community. 

“This should be a time to invest in early intervention, making sure communities have good opportunities for children and families.

“Cuts also put these organisations at risk as they face increased demand, with the additional pressures on families from Covid, cost of living and mental health. This is as well as increased costs of operating organisations, from electricity to staffing. This could ultimately result in the closure of services that are embedded at the heart of communities.

“We understand the need to adapt and evolve to meet a range of challenges, but our sector has illustrated an ability to do that throughout the Covid-19 pandemic. We therefore believe that we have a vital role to play any review of services at City of Edinburgh Council, and to take a partnership approach to developing great community services for children and families.”

Those representing the people of Edinburgh have warned that despite the dire financial situation Scotland’s councils are facing, making further cuts to the city’s third sector is not the answer.

Portobello councillor Alys Mumford, co-convenor of the city’s Green group, said: “Third sector organisations provide specialist, high quality services for people in Edinburgh, and the proposals to cut them are indicative of the short-term thinking that characterises the administration budget. 

“Local councils are facing an incredibly challenging financial situation with a real-terms cut in funding, and ever-increasing costs, but withdrawing funding to charities is not the solution to this. Greens in Edinburgh will be scrutinising these proposed cuts very closely, and our own budget submission will be based on supporting the most vulnerable people in Edinburgh during the cost of living crisis, as well as continuing to make the investments needed to tackle the climate emergency. 

“Sustainable funding for third sector organisations will be vital to the delivery of this work.”

With massive savings expected to come from education and young persons’ budgets, charities focusing on youth services have questioned the lack of involvement from the city’s third sector in the cost-saving process. 

Laurene Edgar is director of LAYC - a charity supporting community-based youth and children's work in Edinburgh and the Lothians. 

She told TFN: “Community-based third sector youth and children’s organisations are a large deliverer of services within City of Edinburgh and in recognition of the vital role these services play, consultation and engagement in any proposed budget cuts would be anticipated.

“The impact of community-based universal youth and children’s work has been clearly demonstrated through recent national and local research, findings confirm the unique role youth and children’s work plays in supporting young people to achieve their potential, highlighted by the sector’s response during Covid – rapidly adapting services to maintain vital trusted adult supports for children and young people.

“Youth work gives a safety net for the most vulnerable children and young people in local communities, providing access to early intervention and preventative services. Cuts to such services will only increase spending in other areas at a later stage”

A spokesperson for the City of Edinburgh Council said: “Edinburgh remains the lowest government funded local authority in Scotland per resident, which is particularly challenging for a capital city. For example, delivering our services to support people facing homelessness will cost us £62m this year. The high inflation and rising interest rates, which have caused a cost-of-living crisis for many residents, also impacts the council and the costs of providing services.

“The scale of our financial challenge was reported in November at £76.5m and officers put forward initial proposals, including a minimum 3% Council Tax rise. Since then, we have been looking for additional ways to balance the budget and this report sets out the recommendations as they currently stand. If all of these proposals are implemented our budget gap would reduce from £21.2m to £3.7m.

“All political groups have had the opportunity to take part in this process and the next stage involves a special meeting next week. However, no decisions will be made before members meet on 23 February.”

Charities face a fraught time as councils across Scotland look to make savings while setting their budgets. TFN has revealed that Midlothian Council is looking at a 100% cut to grant funding - read more here.