Squeezing the lemon or tending the orchard?

Below, Gaynor Humphreys, Director of London Funders, shares some thoughts on the challenges of the coming year and calls for funding that supports resilience, constructive approaches and adaptiveness

London Funders has been tracking two crucial trends in the last few years – the impact on London communities of the global financial crisis and the political response to it in the UK; and the financial context for the voluntary and community sector.

The first of these has been alarming in London, from early signs of ballooning debt, mortgage defaults, mental health problems, family breakdown, domestic violence. At the same time many front-line public services have shrunk or vanished and VCS budgets reduced. Now we are braced for the effect of housing benefit change, the introduction of Universal Credit, continuing housing shortage, localisation of the Social Fund, limitation on access to legal aid and many other intended and unintended consequences of austerity policies. London, with all its complexity and its unique demography and governance, often has a different and harsher impact to face from national changes than other regions. London Funders’ series of meetings, The Funding Landscape, has convened funders for briefings on these issues.

These changes have put increased demands on the VCS at a time when many funders have themselves been challenged. We had the “phoney war” – the period of expected funding crisis for the VCS following hot on the heels of the global financial crisis, when many feared cuts but they were slow to work through.  Even now many independent funders have been managing to maintain previous levels of funding, more or less. Lottery distributors have seen an increase in their funding (though also a challenge to slash their own costs). We have seen both cuts and reorganisation in local authority budgets for the voluntary sector and new approaches to commissioning. We are in the midst of understanding the impact of London Councils’ greatly reduced grants budget. We remind ourselves that it can only get worse as central government takes the shears to local government funding. Cuts will bite deeper in 2013-14 and central government is committed to bigger percentage cuts thereafter.

But just as some boroughs have found ways to maintain service delivery through redesign and efficiency savings, introduced new grants programmes and improved commissioning procedures, so some voluntary organisations have collaborated and re-engineered their services to achieve more with less. Many funders are finding their own ways of maximising their stretched resources (including through mission- or programme-related investment). We have seen some positive change in the midst of these difficult times.

Can we go on squeezing the lemon in this way? London Funders will work with its members this year and next to understand the essence of London’s needs and issues. We will maintain a focus on young people’s services, advice, housing and homelessness, the localisation of the Social Fund, the impact of increasing poverty. We will seek out the constructive approaches and learn from the best investment in the VCS. We will aim to understand the components of resilience and adaptiveness in voluntary and community organisations and see how they can be fostered through the way funding is offered. We will share knowledge and experience between funders and above all explore how funders together can do more.

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