Minister have been told they must take action to address long-term pressures on finances.
A third sector chief executive has spoken out about the long-term financial pressures facing charities, urging the Scottish Government to prioritise stable funding models and better use of resources.
Dr Judith Turbyne, chief executive at Children in Scotland, said ministers in Holyrood should look to longer-term fuding, highlighting the growing financial concerns currently faced by many third sector organisations.
Dr Turbyne was speaking after the publication of a new pre-Budget report by the Scottish Parliament’s Social Justice and Social Security Committee.
The MSPs who produced the report said that prioritising three-year-funding and including provisions for inflation-based adjustments in the next Budget would be vital for addressing the significant challenges impacting Scotland’s third sector.
The findings were drawn from evidence and expertise provided by charities, social enterprises and voluntary organisations.
Dr Turbyne said: “As a membership organisation representing a wide range of third sector voices, Children in Scotland was really pleased to be involved the Social Justice and Social Security Committee’s inquiry, which made space for positive and importance discussions about our future.
“Between the cost of living crisis and inflation, the third sector is facing a multitude of challenges, and many organisations are struggling to meet demand as children, young people and families face their own financial struggles.
“This report sends a clear and concise message – third sector funding needs to be urgently reviewed to ensure that we can continue to support those most in need across our society.
As outlined in the report, the third sector has seen a decrease in Scottish Government funding, with £21.1million allocated in the 2024-25 year budget compared to £21.2m in 2023-24 – marking a 0.5% cash decrease and 2.1% real-terms reduction during a time of high demand for services.
Recognising the critical role the third sector plays in supporting Scottish society, the report said fair and efficient funding could contribute to its continued effectiveness, as witnesses to the Committee raised concerns about inconsistency, complexity, and a lack of transparency in the application process for funding.
The Committee’s report also recognised that short-term funding cycles also divert significant amounts of time and resources away from the delivery of services, which was raised as particularly concerning for organisations working to address long-term, complex social issues, such as poverty, youth engagement, and social care.
Short-term funding, it outlined, not only prevents organisations from engaging in meaningful, long-term strategic planning but impacts on service delivery, which is key to the implementation of Scottish Government policy.
Representing 450 charities, statutory bodies, organisations, and individual professionals across Scotland, Dr Turbyne gave evidence to the Committee and backed widespread calls for a multi-year funding approach to address issues ranging from staff turnover to financial instability.
She added: “The Scottish Government needs to tackle this issue head on, and the third sector needs to see proactive action in the forthcoming budget.
“Without an urgent rethink of funding, focusing on longer-term models of three to five years, many vital third sector organisations will simply not survive the current economic climate.”
