Leaders say they are concerned about the value placed on them by the UK Government.

The voluntary sector will be expected to meet public service demands over the next five years, new research suggests. 

A study carried out by the Charities Aid Foundation (CAF) alongside charity chief executives found the vast majority (91 per cent) of sector leaders believe that charities will be expected to fill gaps in providing public services. 

CAF’s Charity Landscape report shows that three quarters (71 per cent) of charity leaders believe the public are more aware of their contribution to society post-pandemic, and nearly two thirds (64 per cent) think the government sees charities as vital connections to communities. 

However, fewer than a third (31 per cent) think the government values their contribution to public policy, and fewer than one in three (29 per cent) believe that charities are seen as a source of insight to help plan for future crises.

The warning comes amid increasing concerns about household finances - with the household energy cap being increased, national insurance rising and inflation pushing up living costs.  

The research found that financial sustainability is the main challenge for the majority (58 per cent) of charity leaders, but nearly two thirds (64 per cent) of them are pessimistic about government support for the sector.

Three quarters of charity leaders stated that demand for their organisation’s services had increased during the pandemic, and against the backdrop of strained household finances, nearly nine in ten (86 per cent) anticipated that demand is likely to increase. 

Despite this, most (80 per cent) are confident that their organisation could meet demand, only half (50 per cent) are optimistic about the future of the charity sector overall.

Neil Heslop OBE, chief executive of the CAF, said: “The last two years have reminded all of us that charities form the backbone of our society and the contribution they make to our communities and wider society is undeniable.

"It’s clear that charity leaders feel unsettled and now is time for charities to take stock about what they need to do to rebuild their finances and reset their relationships with volunteers, donors and the Government.

“With their in-depth local knowledge and on-the-ground networks, charities are in an ideal position to help the Government achieve the 12 missions announced last week to level up the nation.

“Charity leaders will also be concerned about the impact that the strain on household finances could have on demand for their services. It’s vital that charities feel supported as they continue to meet the needs of their communities over the next few months.”

The Charity Landscape report found that views of charity leaders varied considerably in the UK’s devolved nations.

Around 74 per cent of English charity leaders are pessimistic about government support, compared to two fifths (42 per cent) of leaders in Scotland and more than half (57 per cent) in Northern Ireland.

Charities based in Scotland (47 per cent) and Northern Ireland (38 per cent) believe the government values charities for their contribution to the development of public policy, compared to only a quarter (25 per cent) in England.

Over the next five years, 77 per cent of chief executives in Scotland and 81 per cent in Northern Ireland believe the government will view charities as providers in the public sector commissioning process. This compares to 64 per cent of their English counterparts.

In Scotland, 80 per cent of charity leaders believe that government sees charities as vital connections to local communities, compared to 64 per cent across the UK.

CEO of the Scottish Council for Voluntary Organisations (SCVO), Anna Fowlie, said: “Over the course of the last two years, the essential role of voluntary organisations in Scotland’s social and economic fabric has become even more visible. 

“But the precarious nature of the sector is also in sharp relief. I support CAF’s findings that governments and independent funders need to do more to support resilience and sustainability, alongside charities having confidence and parity of esteem with the public and private sectors.”