The #RunningCostsCrisis is a fight on all fronts, says Kirsten Hogg

I definitely over-used the phrase ‘a perfect storm’ to describe the impact of the pandemic on Scotland’s voluntary sector; little did I know that it would be called into service so quickly again to describe the ways in which rising costs are starting to bite for the sector. 

All voluntary organisations will be impacted by the current crisis, but not all in the same ways.  A combination of rising energy costs, rising transport cost, rising staff costs, reduction in fundraised income and rising demand are evident across the sector. 

Against an already uncertain financial backdrop for many voluntary organisations, this storm will hit many extremely hard. 

In our influencing work around the issue, we’ve tried to take account of the different problems that are manifesting for different organisations. In another of my over-used phrases, there is no silver bullet that will fix everything; UK government, Scottish Government and other funders can all play a role in helping to ensure that the sector survives this crisis. 

We are continuing to push for structural changes to the way that funding works: recognition of core costs, inflationary uplifts, multi-year funding and timely payments have never been more important.   

We are also working hard to ensure that Scottish Government understands the impact of the current approach to funding on staff pay and conditions, particularly to ensure that forthcoming changes to public sector grant-making around the Living Wage take account of the ways in which organisations are funded, and help the sector to provide fair pay for our hugely valuable employees now and in the future. 

That sort of structural change would, if you like, build a boat to help the sector to weather this and future storms. 

At the same time, we recognise that umbrellas or even life rafts might also be necessary (don’t worry, I’m stopping with the analogies now), so we are also looking at what can be done in the short term to tackle the immediate issues that charities, community organisations and social enterprises are facing.   

Together with colleagues across the UK, we called on governments to ensure that financial support is available to voluntary organisations supporting the most vulnerable through this crisis. We welcome the additional support made available by the Scottish Government for advice services, and hope that more such support will be forthcoming through the UK government’s fiscal review and the Scottish Government’s response to that, both as a way to support voluntary organisations and, crucially, to help individuals and families. 

But it is important to recognise that the running costs crisis will impact across the sector, not only those providing emergency support, and it is crucial that while governments are considering ways to help businesses and the public sector, the voluntary sector is not forgotten. 

We also joined with colleagues across the UK to call for charities to receive the same supports with their energy costs as businesses and households. While we await the details from the UK government on how this will actually look, we can anticipate that the measures announced last week, while a welcome contribution to soaring energy costs, won’t be enough to stave off the crisis many organisations are facing. Suggestions that this support will not be in place from October as promised, but will be backdated, add further concern and mean that support may come too late for some. Another route to reducing energy costs may be through accessing the Scottish Government’s purchasing of future energy markets, and we are working hard to clarify how these energy frameworks have fared through the crisis and how we can do more to open up access to voluntary organisations. 

Another key cost is travel, and we have joined the Community Transport Association’s call for HMRC to increase the approved mileage rate for volunteers and staff. We are also working with colleagues and governments to understand more about the potential to support the sector through: 

• additional Gift Aid relief,
• reducing VAT that voluntary organisations pay on energy bills,  
• enabling charities to recover irrecoverable VAT, 
• providing emergency energy support grants to voluntary organisations and SMEs 
• and ensuring that voluntary organisations can access energy efficiency grants.

While it feels frustrating at times to be only chipping away at the edges of this crucial issue, we will continue to fight on these many fronts to secure support for the sector. We are spurred on to do this by the stories that we hear about the impact on you and your organisations, and these examples help us to make the case to governments and others for support. 

If you’d like to share your experiences, please contact runningcostscrisis@scvo.scot. 

Kirsten Hogg is head of policy at the Scottish Council for Voluntary Organisations.