Redundancies begin as voluntary sector feels impact of cuts

Unions report cuts among advice and social care workers, while small and medium-sized charities providing public services look vulnerable, by Anita Pati.

Thousands of voluntary sector employees will be spending their Christmas break fearing redundancy in the New Year.

NCVO’s Charity Forecast from 2010’s final quarter found that 26% of organisations had solid plans in place to cut paid staff numbers during the next three months, an 18 percentage point increase on the same quarter in 2009. Research [from December 16] puts this figure even higher: 38% of charities expect to make redundancies in the next 12 months according to the Charity Finance Directors Group, Institute of Fundraising and consultants PWC.

Kevin Curley, chief executive of the National Association for Voluntary and Community Action (Navca) whose network supports other charities, says that Navca’s member organisations will cut their paid employees from 6,800 to 5,100 by the end of March 2012 with most of the impact from April 2011. Navca’s own staff will drop from 40 to 19.

“We’re talking about seeing considerable compulsory redundancies and I think our figure – not short of losing half of our [own] staff – will be mirrored in many local charities,” he says. As their voluntary sector skills are mainly transferable to the public rather than private sector, Curley adds there is little place for paid workers to go except volunteering.

Charities which rely on public sector funding seem most vulnerable. Some 36%, or £12.8billion of the sector’s income, is from statutory sources. Town halls only discovered the specific cuts to their own funding last week, a measure that the Local Government Association described as “the toughest local government finance settlement in living memory”. The full impact will only filter through to voluntary groups in the next couple of months.

Curley says charities will suffer from these cuts, as councils strive to protect themselves – many local authorities have cut more than 25% in voluntary sector support for 2012 compared with around 5% for councils, he says. “Voluntary sector funding is non-statutory and vulnerable, and local authorities are behaving as they’ve always done – protecting their own services and employees first. Funding for the local voluntary sector is an easy target,” he says.

This process has already started in some parts of the country. Somerset County Council cut all of its £159,000 funding to voluntary sector organisations in the arts in November. On the ground, Curley says small and medium-sized local charities such as youth groups, citizens advice bureaux and Home-Start will suffer particularly as they have always looked to the local government and primary care trusts for support.

Elsewhere in the voluntary sector, other organisations are also planning large-scale redundancies. Volunteering England is consulting with its staff and trade union on making over half its staff compulsorily redundant in March 2011. Slashing its 55 posts to 24 is part of a pre-emptive strike against a potential 60% cut in central government funding. Chief executive Justin Davis Smith describes the redundancies as “heartbreaking” and staff will find out their fate two days before Christmas. Disability charity Norwood is consulting on getting rid of at least 14 administrative posts with 84 posts in its adult residential services at risk of redundancy. It also plans to cut average hourly pay rates and increase its use of technology, for instance, using sensors and alarms during the night, to reduce overnight staffing levels.

Unite reports that frontline advice and social care workers will take the brunt of the cuts. Employment and training charities, which receive the highest proportion of their income from statutory sources at 70% according to the NCVO, are likely to be hardest hit followed by education, law and advocacy, social services and housing organisations.

Mike Short, Unison’s national officer for the community and voluntary sector, says that one of his member organisation’s, a learning disability charity, has experienced an average cut from local authorities of 15% already since the comprehensive spending review, savaging plans and possibly breaching contracts. There are different types of redundancy occurring all at once, he says, although “voluntary redundancy is very rare in the voluntary sector”. Organisations, he says, are restructuring lower management so there are fewer managers supervising more projects, often for lower pay.

Rachael Maskell, Unite’s national officer for the not-for-profit sector, cites other ways that employers are cutting back, for instance, changing terms and conditions, increasing hours or regrading roles to pay less. She says “top name charities” are discussing the loss of up to one third of their workforces. NCVO’s head of research, Karl Wilding says there is, “evidence to suggest that there has been an increase in part-time working: employers are asking people to do shorter hours rather than making people redundant.” NCVO itself anticipates losing 30 people from a staff of 117 by March 31 2011.

Critics of the cuts have been quick to point out the paradox of the coalition’s plans for a big society with such painful cuts to resources. NCVO deputy chief executive, Ben Kernighan, says that charity livelihoods are now, more than ever, at the mercy of their funders. “Now that local authorities know how much they have got, the actions they take in the next couple of months in relation to funding the voluntary sector is one of the very biggest things that will determine the success or failure of the creation of a Big Society,” he says.

Current financial uncertainty, he adds, has forced many charities to make redundancies now in anticipation of cuts in order to have their new structures in place from April 2011:

“A huge proportion of voluntary organisations either have no reserves or very low levels so they have to act now to bring their organisations to the size that matches their income from the beginning of the next financial year. Redundancies will be happening very much from now to the new financial year.” Figures, he says, are unavailable because the process is ongoing.

Although the mood in the sector can seem gloomy, there may be some causes for cheer. Kevin Curley says that new opportunities will appear, particularly for larger charities, as the government opens up public service contracting opportunities in fields such as the new Work programme and rehabilitation of offenders.

Curley says that some organisations may be able to make efficiencies through use of technology while others cut management costs to keep frontline services. volunteers, interns and pro bono work will be more important than ever, although he stresses that an army of volunteers cannot replace paid, skilled and trained workers.

In this uncertain climate, is seems that the the only certainty is that the embattled voluntary sector faces a difficult period ahead.

Anita Pati for the Guardian Professional Network