Blog: Fair funding is a must in the fight against unjust poverty

In Scotland, we’re lucky to have so many community and voluntary groups helping to protect people from the unjust effects of being pushed towards poverty, hunger, debt, and destitution.

Without the work of the dedicated staff and volunteers in these organisations, Scotland would be dragged even further away from our shared values of equality, compassion, and justice.

In towns, cities, and villages across the country, they help people on low incomes reclaim a degree of stability and dignity in the face of constant battering from our unjust economy, and our inadequate social security system.

Whether it’s campaigning for warm, affordable homes, giving people advice about their rights, providing food support, or providing opportunities for education and training – the voluntary sector gives people a lifeline when they need it most.

But – more and more – far too many of these organisations are being left without the security they need to provide these vital services, and meet the needs of people in their communities.

The Poverty Alliance is a strong supporter of the Scottish Council of Voluntary Organisations (SCVO) Fair Funding principles. These are clear, simple, reasonable  demands that – sadly – still haven’t been met by the Scottish Government. They include:

• Flexible unrestricted core funding;
• Timely decision-making and payments;
• Accessible and proportionate application and reporting processes;
• Sustainable funding with inflation-based uplifts; and
• Proportionate, transparent approaches to monitoring and reporting.

Now, the Scottish Parliament’s Social Justice & Social Security Committee is carrying out pre-budget scrutiny on this vital issue. Our Policy Officer Chloe Campbell has been working hard, using a survey to bring together the views of Poverty Alliance members to feed into the committee’s work.

Some 91% of our members who responded said that short-term funding of less than three years was a concern to their organisation, creating worries about continuing to provide services, planning for the future, and building trust in their communities.

“We just build up trusting relationships with our families then we risk not being able to fully support families is we lose funding, short term funding is no good if we are to be able to make changes for families, increase their wellbeing and lift them out of poverty.”

More than 4 in 10 of member organisations who responded to our survey said they don’t get funding to cover core costs, and nearly half of them say they’re not able to cover their core costs from existing funding.

“We are struggling. We have lost our premises, we have been in temporary premises since August last year because we had no core funding.”

Rising costs are hitting everyone in society – especially those who are already struggling on low incomes. So it can’t be right that organisations supporting those people are being left facing insecurity themselves. Just 2% of our member organisations in the survey had been given inflation-based uplifts from all funders. Some 39% had received uplifts from only some of their funders, while nearly 60% said they hadn’t received any inflation-based uplifts.

Our members are at the forefront of the move to a Fair Work economy – a stated national priority but for the Scottish Government. 84% of respondents to our survey said that they currently pay the voluntary real Living Wage. But that commitment isn’t being properly recognised with sustainable funding.

“Small organisations who are committed to fair pay and work conditions… should be rewarded for their contribution to the economy and people’s wellbeing… big corporations can easily take the increase in costs and yet often they don’t. Some sort of incentive for small organisations would go a long way in rewarding those who look after the workforce. This incentive could be through funding that specifically targets third sector organisations who are trailblazing fairness at work and taking far more risks than large corporations and businesses.”

Living Wage Scotland has seen an increase in third sector organisations closing their accreditation, most of whom have reported general financial challenges as the key driver in that decision. Feedback from organisations highlights that this is related to lack of longer-term funding agreements, as well as lack of inflationary increases and overhead contributions not increasing either. For many organisations, the will to pay all staff the real Living Wage is there, but the funding to enable them to do this is not.

One way of helping could be to streamline funding processes. When we asked our member organisations if they felt existing application, reporting and payment arrangements are clear and efficient, answers were split. 50% of respondents felt these processes were clear and efficient, while 50% did not.

We hope MSPs on the Committee will listen carefully to what our members are telling them about funding. We hope their scrutiny leads to real change for Scotland’s community and voluntary organisations, leaving them better able to help people who are being pushed towards a current of unjust poverty. And we will make sure that It’s a key ask during Challenge Poverty Week 2024 in October.