The impact of the Covid-19 crisis on public finance is severe and is likely to get worse. This will impact a broad range of public services and the people that they serve, and will increase existing high levels of inequality in Manchester. This information focuses only on proposed or potential cuts to VCSE sector funding due to reductions in statutory funding. It does not cover impact from reductions in other sources of VCSE funding.
The only detailed information so far available on cuts is from Manchester City Council, so the focus of this information is on these cuts. The possible scale of cuts in NHS funding is not known and nor do we know, as yet, about cuts in other funding from Greater Manchester sources such as Greater Manchester Police, or national sources such as the Ministry of Justice, Ministry of Housing, Communities and Local Government and Department for Digital, Culture, Media and Sport.
Manchester City Council (MCC)
MCC has a budget gap of £105.5 million in 2021/22, representing approximately 20% of the Council’s budget used to support the delivery of services, rising to £159 million in 2022/23. This is due to loss of income (e.g. from M/c Airport Group), costs relating to Covid-19, and additional cost pressures (adult social care, homelessness services and children's services). It is also important to say that these costs have not been reimbursed or covered by national government so far.
There is a high level of uncertainty about MCC’s financial future, and a budget is only being set for one year. The level of cuts faced by MCC depends on the outcome of the Government’s Comprehensive Spending Review on 25 November. This will give a broad outline and more detail will be in the Local Government Finance Settlement which is normally in late December.
A series of budget option reports were presented to Scrutiny Meetings in the week beginning 2 November, which describe a programme of approximately £52 million cuts, in order that these can be delivered in time for April 2021/22. The reports also outline the potential for further cuts but does not give details of these.
Macc have launched a campaign to highlight the importance of the Manchester voluntary, community and social enterprise sector to the city with an aim to secure sufficient future funding. The benefits the sector can bring include:
Manchester has some of the worst health outcomes in the UK and Europe. The only way to change this is to focus on prevention. The VCSE sector has a critical impact on people’s health and wellbeing. If it is reduced in size then this will inevitably impact on the pressure on the statutory sector including waiting lists and people being unable to leave hospital. It will also have long-term impacts on the overall levels of illness in the city.
We need stronger, more resilient neighbourhoods which better meet the needs of the hugely diverse communities that live in Manchester and where people are involved in making decisions. This is the agreed strategy of Manchester City Council, Manchester Health and Care Commissioning and Manchester Local Care Organisation. A key way to achieve these ends is to work with, encourage and invest in the VCSE sector. Many neighbourhoods lack sufficient levels of VCSE sector services such as advice and prevention services for older people, disabled people and carers.
Manchester is a hugely diverse city and becoming more so. VCSE organisations are key to understanding and connecting with diverse communities and for advocating for the wishes and needs of those communities and is continually adapting and developing as new communities and needs arise.
VCSE organisations, due to their connection with and understanding of the people they work with, are trusted by the people they serve to a greater extent than other sectors.
We involve the citizens of Manchester through citizen action, enabling people to support one another, running out organisations, raising money, and a vast range of volunteering opportunities.
The VCSE sector brings money into the city through grants, donations and trading.
The VCSE sector is constantly and rapidly changing and adapting as new needs and new communities arise. The VCSE sector has played a critical role during the Covid-19 crisis.
We have created a new Manchester voluntary sector impact section of this website to record the details and the effect of the extraordinary everyday work of the sector including the #NeverMoreNeeded stories,Spirit of Manchester Awards and No Going Back report.
Manchester VCSE organisations - please add your voice to the campaign by sharing your stories and using the #NeverMoreNeeded and #ManchesterCuts hashtags and sending them to firstname.lastname@example.org.
In October 2020, a number of Manchester VCSE leaders agreed a statement on future funding of the sector:
Manchester VCSE Leaders Statement on the Funding of the Sector – Oct 2020
One of Manchester’s greatest assets is its diverse and vibrant eco-system of over 3000 voluntary and community organisations and social enterprises. They work in arts, sport, mental health, environment, welfare benefits, homelessness, refugees, youth services, domestic abuse, learning and almost every other area that supports the health and wellbeing of the people of Manchester. They provide services, give advice, advocate for the people they help and assist them in advocating for themselves, and work with volunteers. They work with every disadvantaged community in Manchester.
During the Covid-19 crisis, we have played a critical role at both a city-wide and neighbourhood level in food provision, mental health support, provision for rough sleepers, supporting BAME communities, supporting people most at risk of Covid-19, and supporting families. The No Going Back report published by Macc gives an insight into that work but couldn’t hope to capture its richness.
The Covid-19 crisis has impacted on the VCSE sector just has it has on every other sector. Recent national statistics show that the financial position of 40% of VCSE organisations deteriorated in the previous month and about 10% of organisations feared that they would no longer be operating in a year’s time (Covid-19 Voluntary Sector Impact Barometer - Oct 2020).
Much of the funding during the crisis has been short-term funding and organisations do not know yet how or whether they will be able to fund their work in the future. Organisations have faced increased expenses during the crisis in making adaptations and in continuing to run both face to face and digital services. Many are already facing surges in requests for their help and this is only likely to increase as the epidemic continues. Organisations that rely on rent or fees for services have been particularly badly hurt and may close, leading to the loss of critical services and community facilities in some areas of Manchester.
Due to the financial pressures caused by the crisis, a further major threat to the health of the VCSE sector is the possibility of cuts in both grants and contracts from Manchester City Council and Manchester CCG. This funding is especially critical for the sustainability of many organisations as it is long-term and substantial. This funding helps to support many VCSE organisations across Manchester, who then work with and support many other VCSE organisations.
If this funding is significantly reduced, it will have a serious impact on the VCSE sector and their beneficiaries in a number of ways:
1) Direct impact: VCSE organisations will be able to work with fewer people
2) Less money coming into the city: stable VCSE organisations bring in large amounts of extra money
3) Fewer Manchester citizens volunteering
4) Increased pressure on statutory services
5) Less money for Manchester citizens due to less advice and support
Disinvesting in the VCSE sector in the longer run is a false economy. Manchester has some of the worst poverty and health outcomes in the country. If that is going to change then Manchester needs more preventive services of the kind that the VCSE sector delivers. It needs consistent levels of VCSE services in every neighbourhood. It needs more BAME-led organisations that can work with the increasing size and diversity of BAME communities in Manchester.
We wish to work with you in achieving these outcomes.