The State of the Sector
This Monday (6 February 2023) Clinks published its most recent State of the Sector report covering the financial year 2021/22. This series of reports provide a valuable barometer of the latest trends in voluntary sector work with offenders. The key findings in the latest edition were:
- The cost of living crisis is driving up organisations’ operating costs.
- The number of people criminal justice voluntary organisations support is increasing, and the level, complexity, and urgency of their needs continues to grow.
- Organisations are working flexibly and in partnership to respond to changes, but larger caseloads are becoming a concerning feature.
- While many organisations have returned to face-to-face delivery, elements of remote working – where it best meets people’s needs – remain.
- Organisations reported an increase in funding but rising caseloads and running costs meant these increases are insufficient.
- Actions for ensuring long-term sustainability included developing new services, working in partnership, flexible multi-year grant funding, and a strong and connected sector.
- Staff levels remain stable but recruiting skilled and experienced staff is increasingly challenging.
- Organisations are involving people with lived experience in their leadership and delivery.
- Achieving full cost recovery on contracts is an ongoing and increasing challenge.
The research base
The findings are based on 97 responses to an online survey and eight in-depth interviews, accompanied by analysis of data submitted to the Charity Commission by ‘crime and justice’ organisations. Some of the key findings are explored in more detail below.
More than 80% of organisations reported an increase in both the level and complexity of need, and over half of all organisations reported an increase in urgency. Moreover, 69% said their number of service users had increased.
43% of organisations said their largest source of funding was government grants and contacts; these were predominantly large organisations with an income of £500k or more. Conversely, the 42% of organisations said their largest source of funding was grants from trusts & foundations were more likely to be smaller.
Staffing levels stable but recruitment challenging
This year, 40% of respondents said that staff numbers remained about the same. Just over a quarter said their staffing numbers slightly increased, and 17% said they had seen a slight decrease. Only 1% of organisations said staff numbers had decreased by a lot.
48% of organisations said their contract and grant income for 2021/22 had increased compared to the previous year, with a further 24% reporting that it remained the same. However, a quarter of respondents said their overall level of contract and grant funding had decreased. This increase is welcome but Clinks cautions that it must be put in the context of recovery from the pandemic, increasing need, the cost-of-living crisis (see graphic below), and challenges in the value and sustainability of contracts.
One issue that has dominated State of the Sector reports over recent years is the under-funding of contracts to voluntary organisations working with offenders. This year, nearly half of respondents delivering services under contract said they only achieved full cost recovery on half or fewer of their contracts, with 23% saying they did not achieve full cost recovery on any. Half of
organisations said they responded to this by subsidising shortfalls from their reserves, and 46% said they used other funding sources.
Grants and contracts
66% of organisations disagreed that the level of funding they received from contracts was adequate to deliver services to a high quality, compared to 30% who agreed it was adequate. Moreover, 41% of respondents disagreed the financial terms of contracts were sustainable, compared to just 36% who agreed they were.
This contrasts with grants where 54% agreed the grant funding awarded was adequate to deliver a high-quality service, and 64% agreed the financial terms of grants were sustainable.
Larger organisations confident about the immediate future
Respondents were more confident than not about their organisation’s financial sustainability over the next two years: 49% were confident, compared to 21% who were unconfident. A further 26% were neutral. Confidence about financial sustainability directly correlated with the size if the organisation.
The smaller the organisation the more likely that organisation was to feel doubts regards their sustainability with about 60% of organisations with an income below £100,000 saying they were unconfident, did not know, or were neutral about their financial sustainability over the next two years.