the state and the voluntary sector

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Overview of the funding relationship between the state and the voluntary sector


  • 1.The State and the Voluntary Sector Recent trends in government funding and public service delivery NCVO Research | September Supported by:

2. Introduction: the VCS in government statistics Joy Dobbs, NCVO Research 3. Background to the publication

  • The Atkinson review of government output and productivity statistics
  • The Julius Review of the public services industry
  • PASCs review of service delivery by the third sector


  • Measurement of Government output & productivity
  • Improvement/introduction of quality adjustmentsrecommended by Atkinson Review (2005)
  • the output of the government sector should in principle be measured in a way that isadjusted for quality , taking account of the attributable contribution of the service to the outcome.
  • Education & healthcare quality-adjusted
  • ( see ONS Economic & Labour Market review, August 2009 )
  • Legacy projects: QMF

Why ONS interest? 5.

  • The QMF consortium (ONS, NCVO, PSSRU, NIESR) aims to:
  • develop methods for measuring the quality of specific public services : adult social care & pre-school education
  • provide information about the volume and characteristics of services delivered by voluntary sector
  • Data from ONS Inter-Departmental Business Register has allowed the production of more robust information on the VCSreported inThe State and the Sector
  • QMF reports in Spring 2010

The Quality MeasurementFramework (QMF) project 6. The big picture Jenny Clark, NCVO Research 7. The voluntary sector has seen unprecedented growth in the last decade General charities income 1990/91 2006/07 ( billions) 8. and this has been driven by a closer financial relationship with the State. Statutory income to the voluntary sector 2000/01 2006/07 (billions) 9. Statutory income to the VCS has grown with government spending, but is still a small share. Statutory income to the voluntary sector and total government spending (2000/01-2006/07 (2001 = 100) 10. Where does statutory funding come from?And how does it get there? Jenny Clark, NCVO Research 11. Local government is currently the main source of statutory funding for the VCS. Statutory funding to the voluntary sector by tier of government, 2004/5 2006/07 ( billions) 12. DfES and the Home Office together accounted for 36% of central governments VCS spending. Central government departments reported spending on VCOs, 2005/06 ( millions) 13. A shift from grants to contracts has been driven by local government. Voluntary sector grant and contract income from statutory sources, 2000/1 2006/07 ( billions) 14. Where in the VCS does statutory funding go to? Karl Wilding, NCVO Research 15. Funding is largely directed towards VCOs delivering public services. Income from statutory sources by sub-sector, 2006/07 (% of each sub-sectors income) 16. Over 450,000 VCS paid staff deliver public services. Number of employees in the six largest public service employment categories, 2006 (headcount, thousands) 17. Major charities account for 44p in every 1 of statutory funding How statutory income is shared: the proportion of statutory funding taken by each income band, 2006/07 (%) 18. but its medium and large VCOs that are most dependent on statutory funding. The importance of statutory income to different sizes of organisation: (funding as a % of total income), 2006/07 (%) 19. Some organisations are heavily dependent upon statutory incomebut most arent. Relative dependence upon statutory income: VCOs categorised according to how much of their income is from statutory sources, 2006/07 20. Access to statutory income varies according to where VCOs are based Proportion of VCOs in each local authority that receive statutory income, 2006/07 (%) (quintiles) 21. but there issomeevidence that access to funding is related to need. Proportion of VCOs that receive local authority funding, classified by the index of multiple deprivation, 2009 (%) 22. Pointers for discussion 23. Statutory funding matters

  • 12bn statutory funding is clearly critical to voluntary organisations and the communities they serve
  • Local authority funding dominates: and this has been characterised by a clear shift from grants to contracts.
  • Not all have benefited from this expansion: small organisations have not been successful in winning contracts

24. Public Service delivery has shaped the sector

  • The VCS has geared-up relatively quickly
  • Large and mid-sized organisations now rely heavily on contracts to deliver public services, particularly social care
  • At least 450,000 paid staff are involved in the major service delivery areas
  • But the sector is still a minor player in the public services industry

25. Approaching the future with uncertainty?

  • Central and local government funding of the VCS are at historically high levels
    • Is the only way down?
  • But is the VCS critical to the State?
    • Is the scale of the sectors activity too small to matter?
    • 10% cuts will bite hard and unevenly
  • Or do voluntary organisations represent an opportunity to deliver better quality services for less?


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