Austerity and change: steering through choppy waters
By Brian Carr – Chief Executive of Birmingham Voluntary Service Council
That the funding environment for the local community and voluntary sector has changed dramatically over the past few years will be lost on virtually no-one who’s involved in working or volunteering in the field. It certainly isn’t lost on BVSC, which is currently undergoing one of the most fundamental changes in its 101-year history.
The picture isn’t a simple one, however: according to NCVO’s Civil Society Almanac 2017, overall sector income has risen (so has spending) and whilst government income to voluntary groups – particularly those delivering public services – increased for the second year in a row, this growth was mainly amongst the very largest organisations and remains dominated by contracts or fees, with grants making up only 19% of government income. The £15.3bn income that the voluntary sector receives from government sources accounts for a significant part of its incoming resources, but it only accounts for around 2% of total government spending.
What about smaller organisations – the type that make up the bulk of BVSC’s membership (and BVSC itself)? They cannot depend on the aforementioned financial trends for their security. Much depends on what they do, and where they find the resources to do it. Organisations involved in delivering public services – both of the type designed to help those in crisis, and those that help people avoid falling into crisis – are particularly vulnerable. Many of these services – which include homelessness, domestic violence, disability, home from hospital, mental health and rehabilitation services – are financed largely from local government sources; a precarious position, given that local authority budgets have been cut by almost 40% in recent years, with similar cuts reflected in services commissioned by local authorities from the voluntary sector.
The ‘Save Our Support’ campaign
At the beginning of this year, BVSC and a group of our members were involved in launching the ‘Save Our Support’ campaign, which argued against proposed cuts to third sector homelessness and prevention services of close to £10m, and for an bipartite “intelligent commissioning conversation” between the sector and the Council, as a means of figuring out how to achieve the necessary social outcomes whilst engaging with the reality of a rapidly diminishing funding pot. The proposed cuts were considered necessary due to the ongoing squeeze on local authority budgets, but the campaign – which was largely successful – was designed both to support the Council in its argument for a fairer founding settlement, and to push its members to consider other options and to improve its relationship with the voluntary sector.
Although there is a way to go, and the reconsideration of the cuts proposals is a reprieve that affords a window of opportunity for the affected voluntary organisations to remodel their services and finances rather than an end to funding uncertainties, perhaps green shoots are evident. The sector’s mobilised efforts on behalf of society’s most vulnerable – along with several other factors, including changes in the local political landscape – have led to a strengthened Council-voluntary sector relationship, improved communications between the two parties, and a re-energised collaboration on establishing a viable ‘corporate position’ from the Council in regards the city’s voluntary sector and its activities.
“If BVSC didn’t exist, we’d have to invent you!”
This leads me to reflect on the part played by voluntary sector infrastructure support services throughout the process – the type of services delivered by my organisation. Although BVSC cannot – and would not want to – take sole credit for the progress achieved, it was apparent during the Save Our Support campaign that our members fervently valued our ability to bring them together and to coordinate their efforts, channelling them in a single constructive direction, and our ability to have an overarching strategic conversation with the local authority. As several voluntary sector members – and two local authority councillors – said to me at a lobby we held outside the Council House, “if BVSC didn’t exist, we’d have to invent you!”
Without wishing to sound overly dramatic, it’s fair to say that the prospect of the city having to reinvent BVSC is perhaps closer now than it has ever been. Like many infrastructure organisations, we have been hit by the double whammy of diminishing voluntary sector income and the fact that this has been particularly acutely felt in the field of local infrastructure. From the heady days of capacity-building and infrastructure development initiatives like SRB4, Change Up, Transforming Local Infrastructure, and BASIS, infrastructure funding from central government and the Lottery has dried up. Although the picture is variable at the local level across the country, in Birmingham it’s fairly clear. BVSC’s long-standing Birmingham City Council contract (previously a grant), through which the local authority invested in support for local community and voluntary groups and volunteers, ended in March 2016. Since then, BVSC has been resourcing its ‘core’ services through its traded income and the use of reserves – a position that has become unsustainable.
This news may be surprising for some. In addition to the fact that some local authority staff and members are still under the impression they are purchasing services from us, it’s well known that BVSC has drawn considerable non local authority resources into the city’s voluntary sector in recent years (approximately £62m since 2001). To the outside eye, we are far from being an underfunded organisation. However, our recent successes, which include securing Big Lottery Fund strategic programme investment of close to £23m – are centred on service delivery activities rather than generic sector support. This income does of course contribute to our own overheads; but not at a level that enables us to maintain our traditional sector support and volunteering services at the level the sector requires, and some partners expect.
What next for BVSC?
So – to avoid the necessity of BVSC having to be reinvented – we are choosing to reinvent ourselves. In recent months my management team and I have worked with trustees, volunteers, staff and stakeholders to refresh BVSC’s vision, mission and values, and to reconsider our business model. We are working towards helping people to build and benefit from a fair and equitable Birmingham, and doing so whilst embodying the qualities of compassion, creativity, inclusivity, resourcefulness and professionalism. And whilst a key strategic priority is to achieve this by working with and for the city’s voluntary sector, our scope is widening. In addition to actively pursuing ways to develop more social impact programmes – building upon the considerable success, in terms of outcomes, of our Lottery-funded programmes – we are also aiming to establish a fully self-financing ‘core’ business model by 2020; one which enables us to remain independent, relevant, and sustainable, and with the ability to take full advantage of, without being dependent on, the charitable funding landscape. To do this, we are growing our already popular trading activities – which include conferencing, training, consultancy, managed office space, and the provision of back office support around payroll, finance, and human resources. Earlier this month, we launched our new social enterprise, BVSC Business Solutions, which brings these initiatives together and is working to take their benefits to a wider audience.
Is this a scary prospect? At times, yes. I believe that the disinvestment in BVSC’s infrastructure support services is a mistake, and one that makes little financial saving (indeed, given the massive return on investment on our previous infrastructure funding, it constitutes a considerable loss to the city) and seriously compromises the voluntary sector’s support, and BVSC’s stability – but like many voluntary organisations at this point in time, we are where we are, and needs must. Thankfully, BVSC benefits from a solid reputation, an enviable track-record of success, a strong and committed board, a large body of supportive members and partners organisations, a firm belief in the power of voluntary action to make positive changes in the world, and a talented, energetic and passionate team of staff and volunteers. In other words, the right ingredients for transformation and success.
Of course, challenges rarely arrive on their own, and we are making these changes in the context of other challenges and opportunities which include an ever-increasing demand on our time and expertise, and an imminent building move which has been necessitated by a major city centre redevelopment.
Nonetheless, our intention is very clear. We have a job to do – an important one – and we have many beneficiaries, members, and partners to help. We are here today – and despite working in a challenging, volatile, and unpredictable environment, we fully intend to be here tomorrow.