– in the Scottish Parliament on 6th October 2022.
2. To ask the Scottish Government what plans it has to provide additional financial resources for third sector organisations that are on the front line in providing advice and support services as the cost of living crisis continues to deepen. (S6O-01429)
The third sector is hugely diverse and often provides lifeline services to our most vulnerable communities, which is why we have invested around £12.5 million this year to support the provision of free income maximisation services and welfare and debt advice.
Although we will do all that we can, our largely fixed budgets and limited fiscal powers mean that we need the United Kingdom Government to take urgent action to support people in need. We continue to deliver on key commitments to the third sector around fairer funding by providing multiyear funding when we can to provide much-needed stability in these uncertain times.
In the summer, I met a wide range of third sector organisations across West Scotland, including the Lochwinnoch community larder and starter packs Inverclyde. New research from the Scottish Council for Voluntary Organisations has revealed the precarious situation that third sector organisations are facing, with figures showing that 64 per cent of those organisations have reported an increase in demand and 61 per cent have described facing imminent financial challenges. Many are worried about how they will keep their lights on and doors open.
Will the cabinet secretary commit to establishing a new third sector resilience fund, such as that which was put in place at the start of the pandemic, to ensure that third sector organisations can continue to support the most vulnerable, rather than focus on their own survival?
Paul O’Kane raises important points, and he is right to highlight the work of important front-line organisations that are really helping people during the cost of living crisis.
The SCVO has estimated that the public sector as a whole invests around £1.8 billion each year in supporting the work of charities and social enterprises. Around £500 million of that comes from the Scottish Government through a broad range of programmes, including on supporting mental wellbeing, community empowerment, children and families and health and social care.
We are talking to the sector about how we move more to multiyear funding because we know that stability is important, not least to the ability to retain and recruit staff. We will continue to have those discussions and, as we engage in discussions through the emergency budget review and the budget beyond that, we will give consideration to the points that the member raises.
As I just said in my answers to Paul O’Kane, we will continue to meet the SCVO and others to talk about multiyear funding. We are already doing that and will continue to have those meetings. However, I make the point to Jeremy Balfour that, if our budgets continue to reduce, either through inflation—there has been a £1.7 billion reduction in the value of existing budgets—or the potential £18 billion-worth of cuts to public services that could come at us from UK Government decisions, that will put at risk funding across the board, including the support that we give to the third sector. I urge him to have the same discussions with his UK counterpart about the importance of maintaining Scottish budgets for those reasons.
As a former third sector worker, I recognise how much organisations across Scotland support our communities. It is abundantly clear that additional funding is required from the UK Government to meet the demands of the current cost crisis, especially, as the cabinet secretary outlined, the £1.7 billion reduction in our budget due to inflation. What engagement has the Scottish Government had with other devolved Administrations regarding that issue?
The Deputy First Minister spoke with the finance ministers from Wales and Northern Ireland last month. They, of course, are facing similar pressures. The Deputy First Minister and his counterparts wrote to the Chancellor of the Exchequer last week to request an urgent meeting and called for additional funding to deal with the crisis. It is really important that that meeting takes place because it is not only the Scottish Government that is voicing such concerns. The same concerns are being voiced by the Welsh Government and the Northern Ireland Executive as well.