Chancellor of the Exchequer, Rachel Reeves MP, delivered Labour’s first Budget since taking office this summer. While there’s some cause for optimism, and a welcome shift from austerity language, it also brings further financial pressures for the third sector.
The third sector is Scotland’s third largest employer with over 133,000 employees [1], and these employers are now facing a rise in National Insurance bills alongside an increase in the national minimum wage. This will practically make it harder for the sector to attract and retain employees without a corresponding increase in financial support or mitigating measures. We welcome the transitional arrangements for the UK Shared Prosperity Fund, but the reduction in its budget will have a huge impact on the ability of organisations to deliver for communities.
The TSI Scotland Network believes that the work undertaken by community groups, local voluntary organisations, social enterprises and people volunteering has never been more important for supporting national renewal, for creating hope and the kind of fair, compassionate country we all want to see. But it has to be resourced properly. We want to see fairer funding across the sector, including a strategic investment approach and accessible, proportionate, transparent funding and commissioning processes. And importantly, adequate and secure funding which reflects the full costs of the agreed work.
We are looking forward to the potential that the extra £3.4bn to Scotland’s block grant can do to support local communities.
The TSI Scotland Network is a body of expert charities that support, develop and advocate for the third sector and social enterprise and that also make it easier for people to volunteer with a focus on inclusion. There are 32 Third Sector Interfaces – or TSIs – across Scotland; one in each local authority area.
[1] Scottish Parliament Information Centre https://spice-spotlight.scot/2024/10/30/what-we-know-about-the-third-sectors-contribution-to-scotlands-economy/#:~:text=SCVO%20statistics%20also%20estimate%20that,and%20storage%20industries%20(105%2C000).