A letter from one group was read out to minister Richard Lochhead in Holyrood.
MSPs have warned that third sector groups in Scotland are facing significant funding delays which are forcing them to hand out redundancy notices to staff.
Organisations applying for Scottish Government funding have been told settlements may not be handed out until July despite promises these would be settled last year.
Richard Lochhead - Minister for Just Transition, Employment and Fair Work - was speaking to MSPs during a session of the Scottish Parliament’s Economy and Fair Work Committee.
Mr Lochhead was asked by Labour MSP Colin Smyth why some third sector organisations were being forced to hand out redundancy notices to staff due to delays in Scottish Government funding.
During the session which focused on funding and the disability employment gap Mr Smyth said that many voluntary organisations had been told by the government that they would have been informed about future funding by the end of 2022.
Mr Smyth said: “Given that this priority group should be being supported to tackle this low figure, why are organisations who work with, for example, young people with autism, being plagued by such considerable delays when it comes to funding.
“A lot of these organisations were told they’d have government decisions by the end of December. They’re now being told that’s been delayed well into the next financial year. That obviously makes it impossible for organisations to plan and in some cases is leading to them being under threat because they’re having to hand out redundancy notices as it’s beyond the financial year that they’re being informed about funding.
“So can you explain to us what has caused those delays and what the extent of these delays are?”
Mr Lochhead said he would investigate the issue and said he “can’t pretend” he had had that feedback.
He said there was a “very volatile” economic environment at the moment and that the pressure on public finances meant that the budget being proposed at the present meant it was difficult to give organisations assurances they wanted.
He committed to investigating the issue following the session, and promised to report back to MSPs.
During the meeting Mr Smyth quoted one letter from a third sector organisation to the Scottish Government for third sector funding, who had been told that despite promises that decisions would be made by December 2022, a decision would now not be made until “early 2023” with “the intention of commencing in July 2023”, after the beginning of the financial year.
The MSP said: “That means that anyone who employs staff is having to hand over notices because they’ve got a nine-month figure to pay salaries.
“One of the issues that has been raised is why we are not moving to a position of multi-year funding? I know the challenges on that as we have that conversation every year - even if we should be having it every three years.
"There must be a way in which priority project dealing with this are not at least given a minimum commitment of funding over more than one year. We know that budgets vary, but the whole government budget doesn’t vary.
"You don’t tell local government all of their education funding is going to end. They know there is a minimum level in the baseline that will be carried over each year. Why for priority projects, do we not have a minimum level?”
Mr Smyth said that the committee welcomed the commitment to investigate this issue as the committee had had “great difficulty” in identifying why these delays are taking place.
Mr Lochhead said that this debate had been going on for many years, but that he could only point to the pressures on the Scottish Government and that budgets don’t vary as much as he would like.
“There are only so many times you can cut the same cake over and over without growing the cake,” he said.
“We’d like to be in a position to give much more long-term certainty to these organisations, but until the Scottish budget has got the same long-term certainty we are unable to do that at the current time. It’s just a symptom of where we are with the pressure of public finances at the moment.”
