Northern Ireland’s third sector continues to grapple with significant cuts in government funding, the Ulster Bank & CO3 3rd Sector Index reveals today.
The survey of leaders of bodies such as social enterprises, charities, and community organisations shows that almost one-third (29 percent) saw government funding received by their organisation fall in the second quarter of this year.
A further 59 percent said that they experienced no change, which equates to a real-terms decline.
As a result, one-in-four respondents report that their organisation is currently vulnerable to cash flow issues, and one-in-five indicate that their cash flow position has worsened since March.
However, despite this challenging environment, two-thirds (65 percent) of third sector leaders said that their organisation has seen an increase in demand for its services, and one quarter (23 percent) said that they had increased headcount.
Ulster Bank Chief Economist, NI, Richard Ramsey, says this suggests that many third sector bodies are actually adapting well to the new funding reality.
“The challenging environment and the impact on some organisations is clear to see. But many organisations are actually seeing demand for their services grow and are able to increase their headcount. Some of the rising demand is no doubt being driven by need, resulting from, for instance, public sector cuts and enquiries about changes to the benefit system. However, there are also organisations who are becoming increasingly entrepreneurial, diversifying their service offering, and entering new markets. The challenge for the sector as a whole is to continue to adapt and to find new streams of revenue,” he says.
“This is particularly the case with a question mark now hanging over EU funding in the future. Three-quarters of respondents had previously identified the Referendum as something that concerned them, and with a ‘leave’ vote having come to pass, there is now a real need for third sector leaders to envisage and contingency plan for a future without EU cash,” he adds.
Nora Smith, chief executive of CO3, says: “Cuts in government funding, cashflow concerns and an increase in demand for services all point to a challenging environment for third sector leaders. Subsequently, Brexit compounds this uncertainty, and our engagement with our members tells us that the significant majority see it as a negative thing for their organisation. Whilst there is an understandable concern of the unknown, we are a resilient and dynamic sector, used to dealing with challenge, change and uncertainty. Moving forward it is central that we work in partnership with our political leaders and the NI Executive to ensure that the services and work provided by of our sector are protected.”
