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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.

Running costs crisis: bad news and worse news 

This opinion piece is 12 months old

Sean Morrow on how the crisis has impacted his charity – and the toll it has taken 

“Do you want the good news or the bad news?” our finance manager asked as he entered the room.  

A question which appears to be propositioned all too often in recent times yet no longer said with such conviction but instead delivered with a pessimistic tone and a faint smile.  

The two of us unwittingly acknowledge the term ‘good news’ no longer represents any faint glimmer of hope during the average working day in the charitable sector.  

In reality, what is sarcastically proposed is the option of bad news or worse news which we have become so immune to the sensitivity this scenario ordinarily deserves. The bad (and worse) news this time wasn’t the disproportionately rising insurance premiums nor the rising costs of food at our nursery. On this occasion it was the rising energy costs.  

My initial thoughts were ‘this can’t be so bad. We occupy a newly insulated building with minimum energy usage’ surly we can’t be expected to pay much more than we already pay? But our previous efforts and additional investment to reduce energy consumption on this occasion were ineffective. We may have reduced our energy consumption by insulating walls and ceilings covering every inch of building however this was no defence against rising tariff charges. Our efficiency measures were to be capitalised on via an increasing ‘standing charge’. The less we use, the more we pay. But that wasn’t the worst of it.  

Our current energy deal was coming to the end of contract and time to shop around for a new deal. Ordinarily this would be positive situation and a good negotiating position to find a low costing deal. But the state of the global energy markets had caused a crash amongst commercial energy providers and so the worse news was that commercial energy suppliers had removed all deals off the table resulting in a minimal range of options.  

Either we opt for a really bad deal or we sidestep onto our current energy provider’s standard variable tariff. Either way, our budgeted energy costs had jumped from the £24k per annum to almost £120k by the end of the financial year. Not great news for a charity like so many in the sector having navigated the turbulence of Covid 19 where we experienced a overwhelming demand on services, experienced a significant reduction in available funding across the sector and now trying to find a solution to keep the building running.  

We considered all options from installing solar energy and heat pumps which may reduce further consumption through additional investment however we would be vulnerable to the increasing standing charge costing more than the return on investment.   

Bizarrely, it was even more cost effective to hire a generator to supply energy to our learning spaces and nursery if only the community could tolerate the noise and pollution and the daily delivery of fuel. We could face closure. A charity with a history of 25 years could disappear impacting the thousands of community members we support. So what are our options… our team decided to accept sacrifices to avoid impacting services.  

Our office space operates in darkness, our servers shut down, our heating completely shut off and staff have reduced hours and some made redundant. These are sacrifices no employee should deal with in the modern world. We have done all we can to keep things going and desperately trying to secure adequate core funding. We aren’t unique. There are thousands of frontline charities all over the UK in a similar position; depleted emergency reserves, vulnerable to increasing costs and powerless in the global and political arenas to challenge it. We may be managing to compromise now but my real concern is what more can be done the next time our finance manager asks me “if I want the good news or the bad news?” 

Sean J Morrow is chief executive of Rosemount Lifelong Learning