Sector to see 60,000 job losses & large-scale cuts in service provision without more support

Melanie May | 19 August 2020 | News

The coronavirus crisis will cost the sector 60,000 jobs while more than half of charities expect to cut back services, according to the latest Charity Sector Tracker.
The research, from Pro Bono Economics in partnership with the Chartered Institute of Fundraising and Charity Finance Group, saw 455 charities surveyed. It found that 19% of these have already made redundancies, with 23% planning to make further cutbacks once the government’s furlough scheme ends. That number jumps to 44% among the UK’s largest charities, and nearly one-in-ten (8%) of large charities anticipate reducing their headcount by 25-50%, compared to 4% of medium-size charities and 2% of small.
Speaking on the experiences of Blood Cancer UK, its Chief Executive Gemma Peters, said:

“Covid-19 has had a devastating impact on Blood Cancer UK’s finances. Our income has dropped by £6 million and despite extensively cutting operational costs and furloughing 40% of our staff, we have had no choice but to propose a reduction in the number of people we employ by 25%. This is essential to continue investing in research and supporting our community.
“It’s clear that we’ll lose a significant number of brilliant, dedicated, people. Even with these measures, we’ll have £1.8 million less to spend on research this year, which means we’ll be able to do less for people with blood cancer in the short term. It is a gut-wrenching situation but it’s what we have to do to be strong for the long haul.”

With 5,400 job losses already been announced in the charity sector since the start of the pandemic, Pro Bono Economics estimates from its Tracker that the true figure may be closer to 25,600 and that another 34,100 charities sector employees may have lost their jobs by the end of the year.
68% of charities also expect demand for their support to rise in the next six months, but 58% say they are likely to have to reduce the services they offer over the same period.
Among small charities, 54% think it is quite or very likely that they will have to scale back service delivery compared to pre-crisis plans, as a result of financial pressures created by Covid-19. This rises to 57% of medium-sized charities, and 68% of large charities.
This pressure is expected to last into 2022, with 70% of the charities surveyed expecting it to take more than 12 months for their income to return to pre-crisis levels and 26% overall thinking the climb back will take more than two years. In fact, 40% of large charities think it will take this long, compared to 27% of medium, and 18% of small organisations.
Matt Whittaker, CEO of Pro Bono Economics, said:


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“Charities have been under extraordinary pressure since the start of the pandemic. To date they have responded with typical resilience and invention, but the coming months look set to prove tougher still.
“With the recession biting and unemployment rising, the social sector has never been more needed. But an alarming proportion of jobs in the sector are now at risk. That means many of the charity workers who have provided vital support to millions across the country since the start of the Covid crisis are facing a very uncertain future.”
“Navigating this period rests in part on getting more resources into the sector, from government, from existing funders and from members of the public. But it also rests on reversing the public policy neglect the sector has suffered from over many years. That’s particularly true if civil society is to play the pivotal role that it should do in the country’s recovery from the pandemic, helping to fulfil the Prime Minister’s pledge to ‘build back better’.”

Caron Bradshaw, Chief Executive of Charity Finance Group, added:

“Charitable activities and organisations are the glue that keeps communities together and a bridge between the sectors. They want to play their part in the recovery but every day society is closer to losing huge capacity at the heart of our communities.
“The scale of job losses in the charity sector means less capacity to help people survive loss, hunger, unemployment. Charities are vital to help society through the crisis of Covid and will be essential to the effort to rebuild as we go through a deep-rooted recession and a potential second wave.
“These results should ring an alarm bell for Government that without action there is worse to come.”