SCOTLAND’S voluntary sector has faced real-terms cuts in public funding of £177 million since 2021, and many now fear for their future, according to a new report.

A Scottish Council for Voluntary Organisations (SCVO) study has shown that organisations throughout Scotland had their public funding frozen between 2021 and 2023 as inflation hit its highest levels in a generation.

SCVO argue the real-terms effect has been a 5 per cent cut in funding from councils and Scottish government, forcing them to plunder reserves to continue to provide vital front-line services.

The organisation’s head of policy and research Kirsten Hogg warned the situation would only worsen with changes to employers’ National Insurance contributions, which could leave the sector with another £75m to find each year.

She said: “Against the backdrop of reduced real-terms budgets, and a lack of other sources of income, it is little surprise that nearly one in 10 of Scotland’s 46,500 voluntary organisations is unsure whether or not they will still be operating in 12 months’ time.” 

SCVO chief executive Anna Fowlie called for the Scottish government and other public bodies to take a fair funding approach, moving to inflation-based settlements of three years or more — which take into account costs such as uplifts in the Real Living Wage

“We know the times are tight for the public sector, and we appreciate that in that context even standstill funding is sometimes seen as a win,” she said.

“When demand for support from voluntary sector services is rising, including as a result of cuts in public services, it is simply unsustainable to expect the voluntary sector to find the £177m shortfall that these figures tell us our sector is facing.”

The Scottish government was contacted for comment.