Social Justice and Social Security Committee

Meeting date: Thursday, December 9, 2021

Official Report 615KB pdf

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Third Sector Recovery

Item 2 is on third sector recovery. Third sector organisations have been rightly recognised and celebrated for their innovative and fast response to the challenges posed by Covid-19. However, the pandemic has also inflicted real damage, and today the committee will look at the longer-term resilience of the sector and the challenges that it faces. We will hear from two panels of witnesses today.

I welcome the first panel: Paul Bradley, policy and public affairs manager, Scottish Council for Voluntary Organisations; Martin Tyson, head of regulation and improvement, Office of the Scottish Charity Regulator; Kaja Czuchnicka, senior development officer, TSI Scotland Network; and Duncan Thorp, policy and public affairs manager, Social Enterprise Scotland.

I will invite colleagues around the table to ask a series of questions. First up is Pam Duncan-Glancy.

Thank you for joining us and for providing your submissions in advance—the submissions are incredibly helpful. I also put on record my thanks to the third sector for everything that those involved in it have done—this year in particular, but also beforehand. Having spent a number of years of my working life in the third sector, I know how hard those in it work and how important it is.

It is clear to me from some of the evidence that we have received that the impact of the past year on not just the services that you deliver but jobs in the sector, including those that you are able to create, has been significant. You note that some organisations have been struggling and have had to make some painful operating decisions. Could you tell us a little bit about that and about redundancies and how many jobs you think could have been affected by the pandemic over the past year and a half?

Who would you like your question to go to first, please?

I direct my question to Paul Bradley from the SCVO first.

On the impact of the pandemic, overall the sector has coped remarkably well over the past 16 or 18 months. I do not think that that is too surprising, given that the sector operates in an environment that is always uncertain and we are always unsure about what will come next in relation to funding, resource and support.

I stress that, although the sector has shown itself to be resilient over the past 18 months, it is important that that resilience should not be taken for granted. The sector was already in a vulnerable position before the pandemic, as Pam Duncan-Glancy has just said. The outlook for the sector in 2019, just before the pandemic, was uncertain, and SCVO’s state of the sector survey picked that up then.

Our recent research through the Scottish third sector tracker showed that nearly all organisations were impacted by the pandemic in some way. That survey revealed that 98 per cent of the sector have faced challenges since the start of the pandemic, 88 per cent have experienced disruptions to service delivery and roughly half have experienced financial issues. We surveyed about 600 organisations in total, 9 per cent of which had to make staff redundancies.

We know that the Scottish Government provides significant support for the Scottish voluntary sector, and that is really welcome, particularly the third sector resilience fund, which undoubtedly saved thousands of jobs by ensuring that organisations could keep the lights on.

The furlough scheme was hugely important as well. Our recent research showed that 29 per cent of organisations made use of the furlough scheme and that one in 10 still had people on furlough during the summer. Although we expected there to be significant challenge for the voluntary sector when furlough was lifted, that has not come to fruition. One of the biggest issues that we face now is recruitment. The SCVO’s Good Moves jobs portal has had its busiest autumn on record in putting jobs up on the portal for recruitment purposes.

What could the Parliament and the Government do to support the third sector to make sure that we maintain jobs in the sector and ensure fair work practices?

The biggest challenge has to be the short-term funding cycle that many organisations in the sector face—I am sure that you will hear about that from the rest of this panel and from your second panel. With that short-term cycle, it is hard to keep staff in post.

I recently spoke to organisations that are struggling to recruit staff, given that it is midway through the year and they are able to offer only six-month contracts. Also, staff who are on such short-term contracts are always looking for other roles for their own job security. Long-term funding is absolutely vital if we are to provide security to staff.

There is also an issue around the challenges that leaders in organisations face. The pandemic has put a lot of pressure on senior leaders. I know that the Council of Senior Business Officials has done quite a bit of research looking into the wellbeing of senior leaders. I am sure that there are plenty of people who are thinking about their next move and whether they want to stay in the sector because of the stresses that have been put on them as leaders in navigating the choppy waters that their workforce encountered.

The need for inflationary uplifts is another challenge. I spoke to organisations recently that have not had an inflationary uplift for between six to 12 years. Given the cost living increase since then—or even just in the past year—that has a huge impact on organisations that are not always able to dip into their reserves or other available resources to top up wages.

I am conscious of what you said about the number of your member organisations that had access to furlough—it seemed a very small number in comparison with other areas of society. Is that due to the very heavy lifting that the third sector did during Covid in providing services to communities across Scotland? I see that Martin Tyson wants to come in.

I want to amplify a point that Paul Bradley made about slightly longer-term funding. I think that part of the reason why that is important—for example, in supporting employment in the sector—relates to the ability of charities to build up reserves. There is some evidence that charities—particularly smaller charities—went into the pandemic with quite low levels of reserves, and the ability to build up reserves would help the resilience of the sector.

Does Paul Bradley or anyone else on the panel want to reflect on the apparently low number of organisations utilising furlough? That low number suggests to me that a number of organisations had to keep their operations pretty steady throughout the pandemic. Is that an accurate reflection?

The research that I mentioned is one survey from the SCVO’s work. I am not sure whether other panel members are able to dip into other surveys that they have published.

It is absolutely the case that the voluntary sector has been on the front line throughout the pandemic. The Scottish Government’s initial package of £350 million highlighted its recognition that the public sector would not be able to meet people’s needs without the help of voluntary organisations, charities and other groups in communities. The Government’s resilience funding, which I think totalled around £22 million, to keep the lights on in charities, would have been hugely helpful for organisations that were cash strapped. However, as I said, voluntary organisations on the front line, including many of our members, would have experienced the busiest period in a lifetime.

You are absolutely right. I take my hat off to everybody who continued to work and provide services throughout the pandemic, putting themselves at risk to help others across society. It was an incredible effort, and it is still going on in communities across Scotland.

Are Kaja Czuchnicka or Paul Bradley able to reflect on one of the positive aspects of the pandemic for the third sector, which is the anecdotal spike in volunteering that has taken place across Scotland, with people giving their time and services to local organisations? Is there evidence to support that spike?

Absolutely. Within the TSI network, especially in the Ready Scotland campaign, there has been a huge spike in volunteering. We are locally based and do not have statistics for the position across the country. However, as an illustration, in Edinburgh, 5,550 people signed up and 524 volunteers were onboarded to the community taskforce that helped people with support, such as prescription delivery, which continues today. As of yesterday, there has been a small decrease to 446 volunteers, but there has been a huge interest in volunteering, especially during the initial stages of the pandemic. With the furlough scheme finishing and people going back to work, we have seen a drop in volunteering, but the numbers are still a lot higher than they were before.

We need to think about how we build on that coming out of the pandemic. I gave an Edinburgh example, but the position was very similar across the country. For example, in East Dunbartonshire, 835 people signed up for Ready Scotland, 500 replied and 384 were placed, supporting communities through our mutual aid groups. There has been a huge volunteer effort and we need to think about how we build on that for resilience. Apart from local support for TSIs and Volunteer Scotland support, I wonder how we can build towards a national effort.

I see that Paul Bradley is looking to come back in. Does that reflect the SCVO’s view as well? Is the spike likely to be a result of people having far more time on their hands due to furlough, so they were able to give more of their time? How do we harness the positive aspect of what has happened during the pandemic to encourage people to keep supporting their local third sector organisations?

The voluntary sector relies heavily on volunteers—that was the case even before the pandemic. I think that nearly three-quarters of voluntary organisations in 2019 were run solely by volunteers; a much smaller percentage rely on a paid workforce.

As Kaja Czuchnicka mentioned, and as others will say, there was a huge spike in interest in volunteering. Some of that came about because people had more time, but I think that it is in Scotland’s nature to want to be part of volunteerism. Before the pandemic, 1.4 million people could be at least informally classed as volunteers, and that number has increased, especially through informal volunteering. Voluntary organisations were not able to place every person who wanted to volunteer during the pandemic.

09:15  

There was a huge increase following the Scotland cares initiative to drum up volunteering, and the emergency need for volunteer support was very well matched with infrastructure that was already in place. That goes to show the importance of fostering and investing in infrastructure before crises hit, but voluntary organisations had a remarkable role in allocating volunteering placements where they could.

It is quite interesting to note from the longitudinal survey that SCVO has been sponsoring that, despite the expected increase in informal volunteering, which is quite hard to capture, 36 per cent of the organisations that were surveyed as part of the tracker reported a decrease in the number of volunteers they usually work with, with only 17 per cent seeing an increase. Supporting formal volunteering is not free; it costs, and infrastructure has to be in place. You need effective volunteering managers who can support people in voluntary positions, particularly those who require additional support.

We know from the Scottish Volunteering Forum that economic pressures have led to some of the volunteer management roles in organisations going missing after the pandemic through redundancy, and some volunteering managers were placed on furlough during the pandemic.

The picture is not complete: we have seen a rise in informal volunteering, but the survey suggests that there has been a decrease in the number of volunteers that organisations that rely on volunteers all the time are able to support.

I can see that Duncan Thorp and Kaja Czuchnicka wish to come back in again briefly.

Thanks for the invitation to give evidence today.

I echo what has been said. The patterns are reflected in the social enterprise community as well. There were a lot of predictions about the catastrophic impacts on third sector organisations in terms of jobs and organisations being able to survive. I think that those impacts have not happened because Scottish Government funding, furlough funding and so on was put in place quite quickly. All credit to the Government and ourselves as a sector in getting that funding in place.

We need to look at long-term recovery. A lot of organisations have survived, they have retained staff and they are working in communities across the country, but we need to look at the longer-term impacts. Perhaps it is time to survey and do a bit of research around what the longer-term impacts of the lockdown period might mean for third sector organisations.

I echo Paul Bradley’s point about investment in volunteering management. I think that the current situation is a foundation on which good volunteer practices can be built, with volunteers supported in their role. However, I also want to touch on the barriers. Paul Bradley mentioned that some formal volunteering has reduced, sometimes because volunteers were shielding or were from an older demographic.

We need to consider how we support people who are shielding or who are experiencing other barriers to coming back to volunteering to ensure that they can support the charitable sector. Part of that is to do with investment in volunteering management and ensuring that volunteering managers are equipped and skilled in helping organisations to address those barriers. However, in some cases, investment may be needed to support organisations with the practicalities of reducing those barriers. For example, sometimes charities do not have funds to make the adjustments that are needed for disabled people.

There are two different routes for investment: one is investment in volunteering management, and the other is in making sure that organisations are equipped to support volunteers the best that they can.

I am interested in the volunteer part, because we need to do all that we can to break down the barriers associated with volunteering. We heard recently about the barriers regarding universal credit that people face when they try to volunteer.

The Scottish Government has acted in several ways to support the third sector during the pandemic. What has worked well and what can be improved? What good lessons can we learn for the future?

As I mentioned, we were pleasantly surprised and pleased with the response from not just Government but non-Government funders in getting money into social enterprises and third sector bank accounts quite quickly. There was an initial shock period when organisations felt that they were in crisis, but that funding reached people quite quickly, so that worked well.

Going forward, if we look at a similar kind of situation that did not work, there were a number of barriers for the social enterprise community. Start-ups and pre-start-ups fell through the cracks a bit in terms of funding support. An organisation that I spoke to was about to launch a week after lockdown and it literally could not access any type of funding. I think universal credit ended up being the only source of funding that its staff could access. Community interest companies, which are a key type of social enterprise, have on-going issues. They are facing barriers relating to funding from non-government sources in particular.

A number of types of organisation fell through the cracks in terms of funding but, overall, we did not face the catastrophic situation that we thought that we might face, because funding reached bank accounts quite quickly on the whole. Non-Government funders were good at pivoting and adapting the grants that they had given and saying, “We said you need to spend it on this particular project but, in the circumstances, you can spend it on something else.” I think that that was the case with local authorities as well. There was a flexibility that was not particularly there before.

I echo the point about independent funders. It has been the first time that the SCVO has worked so actively with independent funders. Over the pandemic, we have shared learning and experiences, and looked at where there have been needs and how funds can be adapted and people supported through them. That has been positive and I hope that that will continue.

The Scottish Government support for the sector was fairly rapid and strategic. It was a positive thing that the £350 million package was announced in March, well before the United Kingdom Government announced any funding for voluntary organisations or support for resilience through equivalent wellbeing funds for communities. It was great that there was recognition that we could play a vital role and that the infrastructure was there to do that.

On the positive side of things, there was trust in the voluntary sector infrastructure to understand its communities and organisations, whether at a national or local level, and the sector was trusted to help design systems, processes and procedures to get funding to where it was needed most. That was a huge success. Of course, there is room for learning, and that is what we are here to do today and will do in other sessions, but the sense of partnership between the Scottish Government, the SCVO, funders, third sector interfaces and others around things such as the shared funding platform that the SCVO set up along with partners, which streamlined the application process and made it more accessible, was hugely important. That partnership working is needed at time of crisis to share information and build systems that are agile enough to get funding to where it is needed most.

Using existing infrastructure was important, as was the speed. The Scottish Government pivoted its funds based on need. We started with the third sector resilience fund and the wellbeing fund. The resilience fund was all about keeping the lights on and the wellbeing fund was about getting small sums of money out at the start to people in communities who were most in need, to get supplies and so on. Later on in the programme, we had the adapt and thrive fund, which was about supporting organisations to adapt their services for the long term of the pandemic. Overall, each organisation played to its strengths, and it was an example of barriers and egos being dropped. People worked together for a clear outcome.

We have to be careful when we talk about things that did not work so well because of all the great things that did work well and at such pace. However, having spoken to our funding managers, it is clear that the split between the resilience fund that was keeping the lights on and the wellbeing fund that was about getting money to voluntary organisations to support people created two different application systems. Would there have been a better way of doing that? I guess that, with the benefit of hindsight, one would have wanted something that was nicer.

There was some confusion on the ground about the different funds that were available. Some funds were open and some were not, and some funds were allocated based on prior knowledge of organisations in local areas. I am not saying that that is a bad thing, but the transparency around some of that could have been improved.

Linked to that is the reflection that because the different funds were managed by different parts of Government—the funds that the SCVO worked closely with were run by the third sector unit, but others were managed by different units across Government—and there were different application systems and ways of reporting how funds were being distributed, it felt at times that there was not someone behind the scenes in Government joining all the dots together.

Our engagement with the Scottish Government on funding was fantastic during the pandemic. We have to focus on the things that could be improved for the future, but at the same time we need to recognise that it was a positive experience overall.

I echo all the points that Duncan Thorp and Paul Bradley have mentioned, especially those around the flexibility of the Government funds and the independent funders.

Paul Bradley mentioned trust in the intermediary bodies. I think that that trust has been extended to third sector organisations and in some cases, although not all, that has changed the relationship between the funder and the funded organisations. It is important that funded organisations have been trusted to do what they do best for their communities and the people whom they support, and we would like to take that into the future. Other positives included routes and platforms for local intelligence to be fed into the funding processes, and we would like to take those into the future as well.

I am pleased to hear that the things that were put in place were positive and I hope that they will continue, because it shows that we can do things differently and be very fleet of foot when we need to be. It is encouraging to hear that.

The question that I have is specifically on the resilience fund, the local authorities that were initially able to access it and the additional 10 local authorities that were able to access it subsequently. Kaja Czuchnicka, are you aware of how they were chosen? Did the funding go to the areas where it was needed the most? When the additional 10 local authorities were added, did that come with additional funding or was it a case of spreading the initial funding slightly differently?

With the resilience fund?

Sorry. I mean the communities recovery fund.

TSI Scotland Network has not been involved in that, so I am not aware why the choices were made.

Does anyone else on the panel want to comment?

Paul Bradley is looking to come in here.

09:30  

I do not have a very clear answer, unfortunately. The SCVO provided the platform for the distribution and assessment of many different funds. That included the communities recovery fund, but what was different about that is that we did not have any involvement in setting up the terms of how that fund would be managed or allocated. In that respect, we are not clear on how those decisions were made, but I wanted to be clear that there was SCVO involvement in the fund, in terms of the shared funding platform that we developed and built with partners, which we allowed the Scottish Government to use for different funds.

I go back to the point about what did not work so well. Maybe there was a lack of transparency around how some of the different funds were put together. Obviously they were put together at speed. I am sure that there were absolutely valid reasons for why certain groups were picked over others, which I am sure could be explained by Government, but that lack of transparency raises issues and two key organisations in the sector are not able to answer that question.

As colleagues have said, we thank your organisations for everything that you did during the pandemic and are doing.

I want to ask a few questions specifically about the funding of third sector interfaces, which have an annual budget of £26 million. How do you see that utilised? Is it sufficient? What would your ask be, given that the budget is being announced today? I will ask Kaja Czuchnicka to start.

The TSI budget has been at a standstill since its inception about 10 years ago, with no inflationary increases. One of the TSI partners has done a calculation, and there has obviously also been a decrease in capacity. There has been a 37 per cent decrease in funding since the day of inception, which is also quite a significant decrease in capacity.

The TSI role evolved as a result of the 2018 review and became more strategic. Many more pressures have been placed on TSIs and, considering the wide spectrum of areas that TSIs are getting involved in at a local level, they have to make harder choices about their capacity to get involved. In some areas, there is investment from community planning into capacity in TSIs, but the picture is different across the country. That means that TSIs sometimes have to make impossible choices in terms of getting involved and supporting the voice of the third sector within locally identified priorities.

TSIs have experienced pressures similar to those in the rest of the sector. In our internal report earlier this year, a lot of chief officers mentioned the challenges of capacity and increasing workloads, for themselves and their staff, mainly due to the pandemic. Partly, that is about demands from the organisations themselves, but it is also about the profile of the sector rising during the pandemic—which is positive—and creating expectations from different public partners that TSIs will get involved in various agendas.

We have worked with the third sector unit and we appreciate and recognise the support that it has provided to us, especially over the past year. We welcome the involvement of the mental health and wellbeing fund and the adult learning fund, enabling us to support the third sector organisations that we serve, especially the grassroots third sector organisations. We also welcome the review of the funding formula that is mentioned in this year’s programme for government.

Overall, there are many positives in terms of ensuring that the capacity of TSIs is adequate for the work that they are doing, but at the same time it is important to remember the decrease in capacity that we have seen over the past 10 years.

Does anyone else want to come in?

The SCVO would not comment directly on the specific levels of funding for our local partners. It is important that the committee listens to the experts on this, which are the TSIs themselves. I could be wrong, but I think that the £26 million that is mentioned in the briefing is not just for TSIs, but a whole range of infrastructure bodies, including the SCVO—I want to be clear that the SCVO is a recipient of the fund.

Obviously, I am here to talk about the wider sector and I would talk about the infrastructure of the sector as a whole and the importance of investment in that, which stretches to the TSIs and well beyond the SCVO to 60-plus national intermediaries that work in thematic areas like health, community, social care and so on. The pandemic has highlighted the importance of having that infrastructure fostered and in place to mobilise groups and get resources to where they are needed. We will not ever know, but it would be interesting to know how we would have supported all those people and organisations over the past 18 months without that solid infrastructure in place. As Kaja Czuchnicka said, however, that has been chipped away at over recent years.

On the point about budgets being at standstill, it is crucial that intermediary organisations and infrastructure organisations receive long-term funding, just like other organisations in the sector, as well as inflationary uplifts. It is also crucial that those organisations are funded based on the needs of their areas, rather than funding just being dished out without any thought given to what the actual need is, which leads to organisations not getting enough resource to manage increasing need. It is vital that infrastructure is supported and funded. As we have heard, over the past three years our budget has gone from about £24.5 million to £26 million, but within that many of the budget lines will have been at standstill and I am not clear on what that increase went towards.

I want to echo the point about the importance of the TSIs but also the general landscape of intermediary bodies. The point for us is that the Scottish charity sector is very much biased towards smaller charities. Most charities in Scotland are volunteer-run and their income is very small, so the support that they get from intermediaries is key. The charity sector is also very dynamic, in that every year many charities are deregistered and a lot of new charities are registered. Again, there is a need for support and infrastructure to be there, so that is a key function. As far as we are concerned, intermediaries are key partners.

Kaja Czuchnicka mentioned community capacity building. I know from going around different organisations in my region that during the pandemic a lot of that capacity building was organic. Previously, organisations would have been more risk averse about such work and people would not have been brought in. The public health emergency response, however, meant that a lot of organisations adapted and built capacity. How do we make sure, for TSIs and other organisations, that that volunteer capacity from those who have wanted to support their communities over the last 20 months, is not lost? What has been learned during the pandemic to make sure that the barriers to volunteering that have previously existed are removed?

A good example is the East Dunbartonshire TSI and how it harnessed some of the volunteering capacity that came from the Reach Scotland campaign throughout the pandemic. At the start of the pandemic, mutual aid groups sprang up in different areas of East Dunbartonshire when they were most needed. Through the Reach Scotland campaign, the East Dunbartonshire TSI directed volunteers to the most appropriate geographical and interest areas for them. The model and the approach that it took is interesting in that it supported the groups throughout. As the volunteers were perhaps moving on to something else, the East Dunbartonshire TSI supported further volunteer recruitment for those mutual groups. It also supported them with governance and helped them to constitute themselves and access further funding and, in that way, it built capacity for those groups and the sector. We need to take that kind of holistic approach when we think about volunteer recruitment, but also when we think about any aspect of the third sector. That is what TSIs are trying to do.

In terms of harnessing the volunteering in the recovery phase, volunteer management is crucial in making sure that volunteers are supported. Volunteering needs to be recognised and supported. That is what makes it thrive. I echo the point that I made before, which is that volunteer management is always crucial and volunteering cannot happen on its own. Support needs to be provided for it.

Paul Bradley wants to come in briefly.

Sorry, my microphone was not unmuted. Can you hear me okay?

Yes.

I want to draw the committee’s attention to the volunteering action plan that is being developed. Stakeholders are working together over the next six or seven months to look at many of the barriers that organisations face. I am not sure whether that was mentioned, because I got logged out of the meeting. I also want to draw the committee’s attention to the Scottish Volunteering Forum as a great resource and a group of organisations that would be well worth speaking to, in addition to SCVO and others, if the committee were to look at this in a little more detail.

My next question is for Kaja Czuchnicka. In your submission, you note that in order to achieve the volunteering for all strategy and to get to a fairer Scotland, a number of social security changes and other changes would need to happen. Can you tell us what those specific social security changes would need to be so that we can support and encourage volunteering?

I echo Paul Bradley’s point that the volunteering framework and volunteering action plan have adopted a very good approach. I know that, as we speak, work is being done on things such as barriers to volunteering in terms of different protected groups and protected characteristics. A lot of exploration still needs to be done to understand some of those barriers—that is one of the things that has been acknowledged within the work that is happening at the moment. Of course, the barriers to volunteering will be different for all the different protected characteristics.

From our point of view, the approach that has been taken to address those issues is a good one, bringing together different stakeholders and looking holistically at the volunteering picture. However, more needs to be done to understand those barriers, because we do not have a full understanding yet.

09:45  

Can you talk specifically about any barriers within social security?

In social security, I know that work is being done across the network and within the action plan around people being able to volunteer while they are on benefits. I think there have been some barriers in accessing volunteering in those cases. I can come back to you with specifics around that. I will need to contact people in the network who are best placed to speak about that.

That is helpful.

My final question is for Paul Bradford and Martin Tyson and concerns the sustained funding. There is now a three-year funding approach from the UK Government. Do you have any indication that that kind of approach will be transferred to the funding arrangements that you will get from the Scottish Government?

There is no real indication, other than what has been said in recent years, about there being a shift to a multiyear funding approach. The idea of multiyear funding is important—yes, three-year funding would be great, but even longer is needed.

In other committee sessions, I have spoken a fair bit about multiyear funding and the response that comes is about a specific Government fund around equalities and human rights. However, that aspect is just a small part of the grand scheme of things, given the hundreds of millions of pounds that go towards the voluntary sector to support it to deliver vital services in communities. We need it to be rolled out across all parts of Government.

Recently I have heard that organisations that have had multiyear funding are now going down to single-year funding. We are trying to do a little bit more work to see where that is happening, where there is good practice and where there is less good practice. In the Public Audit Committee meeting last week, Audit Scotland said that we have to move away from single-year funding if we want to deliver on outcomes. We talk a lot about the Christie commission, which reported more than 10 years ago. If you want to deliver long-term change, then you have to fund for the long term. Everyone around the committee table knows that. I am sure if I was sitting in the room with you, I would see your heads nodding.

We understand the challenges, but we need to find solutions, which, as you say, involve things such as the UK Government’s spending plan, multiyear funding and the Scottish Government looking at how it funds voluntary organisations for the longer term.

I understand that there is uncertainty. Voluntary organisations are sensible; we know that things can change. However, even having a kind of indicative sense that you will get renewed funding—not just renewed funding, but inflationary uplift year on year—is important.

I am more than happy to continue to communicate with the committee over the next months and years in terms of the SCVO’s work in this area, because we are doing a lot to understand where multiyear funding is happening rather than there just being the rolling single-year funding that does not increase.

We have to see progress in this area, for many reasons, whether they are about job security or the outcomes that we want to deliver as a sector and as a country. Unfortunately, where progress is being made, it is slow.

With 10 minutes left, I am looking for brief questions and answers. Martin Tyson, do you want to come in at this stage?

Yes. OSCR’s funding is a line in the Scottish budget and we will find out about that along with everyone else. In terms of the sector funding, I very much echo the point that sustainable and flexible funding is needed for sector bodies from the Scottish Government and other funders. The point that I made earlier about being able to build up reserves is a key one.

There has been a lot of praise for the resilience and flexibility of the sector, but in order to avoid flying by the seat of its pants it must build up resilience and diversity in terms of funding streams. If it is to be able to cope with headwinds like the pandemic, multiyear funding and flexibility in the approach to funding are vital.

The next set of questions is from Jeremy Balfour, who is brevity personified.

I add my thanks for all the work that our witnesses have done. As someone who has worked in the third sector, I acknowledge the pressure that a lot of them are under.

Paul Bradley, going back to last year and the funding that came from the Scottish and UK Governments, I got quite a lot of feedback over the last summer that a lot of the money went to the big charities—the headline charities, which I will not name—while a lot of smaller charities that do more work on the ground struggled to get that money. Is that just whingeing on the part of the small charities or is there any truth behind that? Going forward, how we can get the money to the people who are doing the work, rather than those who might shout loudest?

It is absolutely not whingeing at all. Every organisation faces unique experiences in its funding situation. Recently, I spoke to an organisation that has put in 100 applications for funding this year and has received nothing, just because its area of work is not necessarily a Scottish Government or a national priority, although it is still important. Those are just long-term issues.

On the funding that went to voluntary organisations, of course, there is a lot to learn and we hope that that will come through in evaluations. I am more than happy to speak to our team on that and get back in touch with the committee with the information that we have about the organisations that received the funding, broken down by scale and location.

Initially, small sums of money—in the couple of thousands—were put out through the wellbeing funds to get to people who were most in need. That was distributed through existing networks, where due diligence on those organisations had already been done. We knew that we could trust those organisations and that they had the robust governance in place to be able to handle that kind of money and get it to where it was needed most. However, there were also open applications and all of the information about who got funds and for what, especially with regard to the funds that the SCVO manage on behalf of the Government, is on our website, but I will get in touch with the committee to follow up on that particular point.

Of course there will always be organisations that have missed out. For example, for some of the funds there are issues around the fact that an organisation with too much money in its reserves will not necessarily qualify for certain levels of resilience funding but, if it uses up all its reserves at some point down the line, it might be too late to get resilience funding, leaving it worse off. There are loads of things that we can learn from the specifics of how funds are developed and how we can improve that for small and large organisations, which have unique challenges. It is important that we do not pit small and large organisations against each other.

The issue of reserves and how they are held is an interesting one.

I would like to quickly address the theme of the future reform of how charities are regulated, as we have Martin Tyson here. The Government has announced that legislation to reform OSCR and its practice will be introduced this session. As someone who is a trustee of lots of small charities, the system seems to be heavy on paperwork. Martin Tyson, are you conscious that small charities often have to fill in the same amount of paperwork as the large charities? How do we get around that? Perhaps Paul Bradford and others could tell us what reforms they would like to see, from the charities’ perspective.

I do not think that it is true that smaller charities are asked to provide the same level of paperwork as larger ones. There is a graduated regime. Most small charities will generate much simpler accounts than the larger charities, and we ask smaller charities for much less information in their annual return every year. That is something that we keep under review, and we have slimmed it down over the years.

One of the other things that was a learning point for us during the pandemic was our decision to take a more relaxed approach to enforcing some of the compliance regime. We also took a different approach to some of the documentation that we looked at. One of the things that we are doing at the moment is looking at the innovations and the streamlining that took place during the pandemic and how we can take those forward.

On the reforms to the charity legislation, that is something that we have called for. We have put various proposals to Scottish ministers and we look forward to working with them on those.

My final question is for Paul Bradley. As we come out of this pandemic—hopefully we will do so at some point—do you think that a lot of smaller and medium-sized charities will start merging? Will there be a redefining of the sector because of what has happened in the past two years or will the landscape look fairly similar three years from now?

We have seen mergers that have worked well and others that have not. On a case-by-case basis, if organisations feel that they can deliver better outcomes and do better for people by merging, that is absolutely fine, but I do not think that we should be saying, “There are lots of organisations working in this area so therefore we should be merging.” Lots of those organisations will have different specialist skills—the unique aspect of the voluntary sector is the specialism that is there.

The issue that you raise about charity law is important. A lot of what we talk about with regard to resilience concerns operational and financial issues, but we often forget the reputational resilience of the sector. As we have seen through all the years, there is a reputation that all charities and voluntary organisations share. If something happens to one organisation, the cloud forms over all of us. It is very important that we have robust regulations and legislation in place that supports voluntary organisations—charities, in this case—to do their very best.

In terms of the public trust in charities, it is great to see in OSCR’s recent report that public trust in charities in Scotland is at its highest level since records began in 2009, but we cannot take that for granted. The changes that are being proposed by OSCR and the Scottish Government, with tweaks and with more involvement of the sector in terms of shaping those through the legislative process, are important. It is vital that OSCR gets the powers that it needs to be able to perform its role as a regulator.

One final point is that the sector has not been asked what reforms we would like to see to modern charity law. The legislation has not been updated since 2005. The proposals that are on the table are, rightly, ideas that have been put forward by OSCR and the Scottish Government about how to strengthen the regulator’s role. That is important, but charities have not been asked what changes they need to see. We have been consulted on the proposals that have been made, but we have not been asked about what changes we want. That is important because, at the end of the day, the legislation factors into the reputation of charities themselves—it is not just about the reputation that charities have in terms of having a strong regulator; it is about the reputations of the charities themselves.

It is not the SCVO’s role to say what should change in charity law, but I think that charities need the opportunity to say what they want to see change to ensure their credibility, legitimacy and reputation. If proposals to charity law are implemented over the next year or so, that cannot shut the door to further discussions for another 16 years on changes to charity laws that charities might want to see to make it more robust for charities themselves.

10:00  

Evelyn Tweed will ask the final set of questions in this panel.

Thanks for all your contributions so far, which have been helpful.

How can we make sure that there is partnership and co-operation in the third sector if organisations are constantly competing against each other for funding and contracts? Is there a more holistic way that we can do this? I ask Paul Bradley to answer that.

As I said, the SCVO is sponsoring the Scottish research tracker, which involves nearly 600 organisations. The next wave of those results, in early 2022, will go into some detail about partnership working in the longer term, what has changed since the emergency funding has dried up and so on.

Overall, voluntary organisations are keen to work collaboratively. We have seen that during the course of the pandemic with regard to work that has been done with local authorities, national Government and so on. However, it is the funding structures and systems that are in place that hold all of that back. At a small level, even in the pandemic, the Government was encouraging organisations to work in partnership to apply for grants, but was giving them a six-week window to get their application in, which is just not long enough to form new partnerships and trust and so on. That needs to be improved.

The big issue is procurement, where we have a seen a shift. Every conversation that we have with voluntary organisations about procurement concerns that shift in procurement over the past 10 or so years in favour of cost cutting. Arrangements tend to be unfavourable around fair work practices, inflation and so on, but I think that the point that you make about the competition aspect is important. Making voluntary organisations compete with one another can drive down the quality of services because what is being bid for is not at the right level of costs and it freezes out smaller and more specialised organisations, which we might want to see involved in the procurement landscape.

The issue is not just procurement; it is funding overall. In 2019, the Equalities and Human Rights Committee heard about how equalities groups are pitted against each other to secure funding. In that report on value in the third sector, the Scottish Government was asked to work with statutory partners and the voluntary sector to look at how partnership working could be improved and what its plan was for that. I am yet to see any progress that has been made in terms of that recommendation.

How can we ensure that the third sector is at the heart of social and economic recovery? What can local authorities, UK and Scottish Governments do to ensure that that happens? I put that to Duncan Thorp.

Apologies, everybody. My broadband just went down completely, which has not happened in the past 18 months, bizarrely. Could you repeat the question?

Yes. How can we ensure that the third sector is at the heart of social and economic recovery? What can local authorities, UK and Scottish Governments do to ensure that that happens?

Some of it is about mainstreaming, to be honest. If a charity or a social enterprise deals with a certain department in a local authority or the Scottish Government, it can get funding but, often, it is the case that other departments within local government or central Government do not understand social enterprises and the third sector. There is a real issue with just mainstreaming the sector and breaking out of our bubble, in a sense.

Certain economic development officers in local authorities understand social enterprises and deal with them every day, but certain procurement officers or other departments in local authority do not have that understanding. We need to break away from talking to the usual suspects and try to speak to other officials and departments to get them to understand. Sometimes, all that is needed to start with is basic awareness raising, because there is a bit of a misunderstanding about what charities and social enterprises do and how they contribute to our economies at a local level.

Thank you. I can see that Martin Tyson and Paul Bradley are looking to come back in but I am sorry to say our time for this evidence session is up. If there is anything that any of our witnesses feel that they have not been able to get across, I would be delighted to receive that in writing, if you are willing to do that.

I am grateful to you all for your time and insight this morning. It is very helpful in terms of our work and we greatly appreciate it, so thank you.

I will suspend the meeting for two minutes while witnesses change over.

10:05 Meeting suspended.  

10:08 On resuming—  

Welcome back. We are grateful to colleagues who have joined us on the second panel. We have Ian Bruce, the chief executive of Glasgow Council for the Voluntary Sector; Eoin MacNeil, the chief officer of Voluntary Action Barra & Vatersay and partner in Third Sector Interface Western Isles; Glenn Liddall, the chief executive of People Know How; Suzie Burt, a trustee of Letham4All; and Myles Fitt, the strategic lead on financial health at Citizens Advice Scotland.

The first question is from Pam Duncan-Glancy. I again remind colleagues to direct their questions to named witnesses.

Thank you for your submissions and for joining us. I would like to put on record again my thanks for the work that you have all done, particularly in the past year and a half, which I know has been a really difficult time for the sector. I appreciate the work that you do.

My first questions are for Myles Fitt. In your latest data, you have noted a 138 per cent increase in visits to your mental health web pages. Why do you think that is? What are you hearing through your bureaux? Could you tell us a bit about the model that is being used to deliver services online or by phone, and the importance of a hybrid approach, if, indeed, that is what you are hoping to do going forward?

Yes, there is an increase in people coming to us with mental health issues. A good way for me to respond would be to take a financial health perspective, which is the area in which I work. Debt and mental health and money are interlinked. Some people have money problems that cause mental health problems, and mental health problems can be exacerbated by money worries. Throughout the pandemic there has been a whole set of concerns about people’s finances, their wellbeing, whether they are managing to pay bills and all the other ups and downs of their financial lives. That has led to an increase in people who are coming to us with mental health concerns. That is an area of focus for the CAB services and for Citizens Advice Scotland going forward.

In terms of how we deliver advice, we embrace a multichannel approach for anyone seeking advice. That is not just face to face. It might be through email, web chat or phone advice; we also do that through our online pages.

At the height of the pandemic, we were seeing a significant amount of traffic coming to our online site. Understandably, people were looking for employment and benefits advice, because that was where their concerns were. They were also looking for advice about paying bills and budgeting. That was not necessarily about debt as such, but about money more generally—that is, how to pay their bills and how to manage their money. There is a whole set of ways in which people have been engaging with the service.

The pandemic has necessitated a multichannel approach and we fully endorse people having all the options open to them. However, it is incredibly important to be able to give vulnerable people the opportunity to have that contact face to face and we want to ensure that the face-to-face element does not get left behind. We are very keen to make sure that that remains an integral part of how we deliver our services and that digital does not become the default necessarily. As I said, that should be part of a range of options.

My next question is for Ian Bruce. Could you tell us a little bit about the experience of your organisation in delivering for the people and organisations that you represent, specifically around the employment of people in your organisations? Have you seen any need across Glasgow for redundancies? Has that been an on-going concern in the past year and a half?

I am happy to answer that. For a range of reasons, we have not seen the levels—[Inaudible.]—at different points in the pandemic. We had expected the UK Government furlough scheme to mitigate some of that early on. We saw additional investment from the Scottish Government early on, which enabled many organisations that might have had to make tougher decisions to pivot their organisations and think about how they might respond differently.

Up until now, we have not seen huge numbers of redundancies. However, we are now starting to see some organisations struggling, particularly as they start to look forward to the next financial year. The investments that have been made during the past 18 months have to an extent mitigated some things, but many of our members now lack clarity around what happens next and what funding they will have next year.

10:15  

A number of our members are telling us that, at the moment, they are sitting with deficit budgets for next year. That will almost certainly result in conversations around redundancy. For me, that sits at the heart of the capacity of those in the sector to be fair work employers. The context is that many people in the third sector are often on time-limited contracts and a proportion—not the overwhelming majority but certainly a significant proportion—of third sector organisations find themselves repeatedly going through the motions of redundancy. They are putting people at risk of redundancy—even if they are then able to withdraw that—because they do not have the reserves or the income security to be able to avoid doing so. That is a challenge.

Thank you very much for giving evidence this morning—it is really helpful and very much appreciated.

There is a lot of joint working between the third sector and councils. How important is the third sector relationship with local government, and what can be done to improve it? Are there any examples that you can give of good practice during the Covid pandemic that you would like to highlight? I will put that to Myles Fitt and Ian Bruce.

Throughout the pandemic, local authorities were really great in terms of applying forbearance when it came to issues around paying council tax and other payments that people have to make to local authorities. There was great flexibility from local authorities, which is something that we would certainly want to see going forward.

There is a strong link between the CAB service and local authority services. The pandemic has shown that there is strong working together on various areas. Everyone talks about the new normal and how we progress. We would like to see that approach continue, and we certainly will endeavour to do that.

There are some great examples to share. During the pandemic, I had the sense that the rule book got thrown out the door in favour of relationships and trust. That was very powerful. We saw organisations coming together. We worked with our local authority around the development of the Glasgow Helps framework, which is about understanding which organisations in the city are best placed to help people and to marry that up.

We are not out of the pandemic and the old system is already starting to creep back in, which concerns me. For example, we have seen welcome financial interventions from the Scottish Government cone in the city on issues such as employability and children’s mental health. Those resources are to support people during challenging times. Everybody would expect the third sector to play a significant part in that, but we have faced barriers around procurement in particular, and commissioning more broadly, and how that money can flow from local authority coffers into third sector organisations that are best placed to deliver. That process is slow when the response needs to be fast.

During this year in particular, we have seen a number of interventions from the Scottish Government that involve money that requires to be spent in-year. Local authorities are in a position in which they are simply saying that they cannot get that money out the door legally in a timeline that would enable any organisation to deliver anything meaningful in the year. That is a real concern because that is the sort of red tape that we were able to put aside during Covid but that is very much back in play now.

What can be done to improve that? Back to you, Ian.

I suspected that that question was coming back to me. We need to have a real think about what commissioning and procurement look like. There are two things to consider. I welcome the Auditor General’s comments the other day about people being scrutinised. I do not want to misquote him—his comments were about people being freer to take chances. There is some capacity in the current rules for people to be a bit more relaxed, but we probably need the rules to be transformed.

A lot of the value of what third sector organisations do comes from the relationship that those organisations have with the communities and the people who they support. Our current procurement approach does not recognise that. A lot of the procurement that we do treats the commissioning of such services not hugely differently from the procurement of information technology support or the procurement of pencils for schools.

Glenn Liddall wants to come in here, too.

I thank the committee for inviting me.

I would like to respond on how the third sector and the public sector work together. I ask the committee to forgive me, as I have not been at one of these meetings before, so I might be wide of the mark, but it seems to me that a lot of what has been said this morning has been quite absolute—it is this way or it is that way—whereas a lot of the work in the sector is far more nuanced.

Of course there are good examples of where the third sector and the public sector have worked together, but there are still lots of barriers, which go back to times long before the pandemic. We still have a situation in which people work in silos. That happens in local authorities and in the public sector. Trying to get two different parts of the system to work together is a struggle that I regularly experience. My first point is that silo working still very much exists.

There is also a tendency to operate in a manner that involves taking a first aid approach. What I mean by that is that people look at the immediate or emergency response—what can be done to patch things up—and they struggle to consider the more structural and systemic system changes that need to be made in order to do things differently. Many things that still happen are created by the system; if we changed the system, we would not have to address some of those things.

My third point is about the power dynamic. We have heard good examples of how everyone is working together and is valued. There is truth in that, but there is also an issue around parity of esteem. As I am sure that you will all be aware, at the hustings all political parties said that there should be parity of esteem between the public sector and the third sector, but it simply is not there. A lot of that is around—[Inaudible.] A lot of the language that has been used this morning has been very absolute and very cognitive—it has been about what we need to do—whereas a lot of what needs to happen involves getting a greater understanding of the third sector. There needs to be a shift and a change in culture and values and in how we look at such relationships.

Another thing that has been missing from this morning’s discussion is that at People Know How we talk a lot about connect four, which is the bringing together of the public sector, the third sector, the business world and academia. When we can get people in those spaces working together, that is a powerful combination. We have extremely good examples of that.

I can see that Eoin MacNeil and Myles Fitt would also like to come in.

There is an issue around the community empowerment agenda that comes down from the Scottish Government, which goes through local authorities and makes its way through to our communities. Our communities look at it and think, “What is this?” They are told, “Well, we’re going to give you some more powers.” Along comes the pandemic and, all of a sudden, there is a rush to put the onus on communities to sort out local affairs, with some money being provided to support that. It is probably worth while looking back at how well communities reacted to the challenge of being provided with resources in a very short space of time and having to target them.

I would like to make the point that voluntary organisations—I am speaking from a CAB perspective—should be seen as essential community assets. The CAB service is a very important service, but it is also an essential community asset. CABs are anchored in local communities and they deliver a service that is best suited to local needs; they provide a local connection between advisers and local people, which is extremely important. There is also the opportunity for people who are volunteers to go on to other jobs and get into employment.

It is important that there is recognition of the third sector from the point of view not just of service delivery, but of the value of the role that it plays in the community. There is the community wealth agenda. Across Scotland, organisations are more than just service providers; in many ways, they are assets to the community. That should be recognised by the committee, by the public sector and by the Scottish Government.

Thank you for your responses so far, which have been helpful.

Could you tell us a bit about the recovery fund that went to specific local authorities? Are you aware of how that money was delivered and distributed? What were the criteria? When the additional local authorities were made eligible for that funding, do you know whether additional funding followed that or was the original amount spread out further? I would like to hear from Ian Bruce and Eoin MacNeil on that.

Glasgow City Council was not included in the original 10 local authorities, which was a surprise to us, considering the challenges that we know exist in the city, and we were further concerned that it was not included in the additional 10 local authorities. That is all I can say in response to that question. To be honest, we have not had any further involvement in the fund, other than to express our concern that Glasgow City Council was not included.

The funding that we got in the Western Isles was targeted. My only comment is about the lag in the administration time between understanding what the fund was about, putting in an application and waiting for approval. When organisations run funding that is to go out to communities, they have to consider the amount of administration that is involved for third sector interfaces and local partners, and the time that it takes to put out the funding. They tend to follow normal audit streams, but because of the time that it takes to identify where the need is, four months might have passed by the time those who need it get the funding. By that time, the need might not be as great.

I have one additional question. We heard earlier about some of the disadvantages that people experience in volunteering and that the number of disabled people who have volunteered is of concern. Can you tell us anything about those figures? Do you have experiences that you can share with regard to improving volunteering or supporting disabled people to volunteer? How could we make that happen across the country?

I do not want to pick on someone, but I know that, in Glasgow, the Glasgow Disability Alliance has been involved in a lot of work, so I put the question to Ian Bruce. Is there anything that you could share that we could listen to and look to use to bring about improvement elsewhere?

10:30  

I will speak because you have come to me, but I want people to be aware that the third sector interface in Glasgow is a partnership TSI, so volunteering is not our area of focus.

However, a challenge that we have heard about over the past 18 months is that organisations have told us that bringing new volunteers on board during the pandemic has been particularly difficult. I listened to the discussion with the first panel, when a point was made about the recognition that volunteering is not a free activity. We need to make sure that third sector organisations are resourced in a way that enables them to think about how volunteering is effectively included.

There is also a wider agenda about how we improve equalities practice within the third sector. The third sector is an important part of society in Scotland and contributes hugely, but we have to be honest and recognise that equalities practice in the sector will not always be as good as we would like it to be. An area of focus for us as intermediary organisations in the future is to support our sector to make sure that we are always being inclusive and are always at the forefront of ensuring that everyone is able to participate in our sector.

I can see that Myles Fitt and Glenn Liddall want to come back in, and I am conscious that we have not heard from Suzie Burt yet. Suzie, if you have anything that you would like to add, please type an R in the chat function.

I echo Ian Bruce’s point. There has been an increase in the number of volunteers who want to get involved with the CAB service, but the challenge of the pandemic has made it difficult to respond and give them the necessary training.

With regard to the question about volunteers who are disabled, I cannot answer that now, but I would be happy to contact the committee and Pam Duncan-Glancy later with an answer.

Thank you. That would be helpful.

I thought that we should respond because, at People Know How, we talk a lot about VIPs—volunteers, interns and placement students. In the past 12 months, we have had about 250 such people supporting us, along with a staff team of 20 or so. They are essential to us. We simply could not do all the things that we do without them; they hold a range of responsibilities. It is also worth pointing out—again, this is obvious—that our board of trustees, as with every charity, is made up of volunteers, who bring a huge amount of experience, talent and time to the organisation.

On supporting people with disabilities, we have always taken the approach of being very open to everybody and, wherever possible, we will make adjustments and support people. A number of our regular volunteers have a range of disabilities. It is also worth acknowledging that some disabilities are quite hidden and less obvious, so it is not until you get to know somebody and unpack that that you find out what their needs are and how best to support them.

As an organisation, we went through the process to gain our investing in volunteers accreditation. That has been extremely important to us. We must be open to challenge when we have not got it right. The whole sector must constantly look at its practice and how we can do that in the best possible way.

I have another point to make, which is not directly related to supporting people with disabilities but is about supporting the voluntary sector to support volunteers. We have a volunteer officer and we are looking to recruit a volunteer co-ordinator. There has been a lot of comment about how volunteers require lots of support. That is absolutely right and true, but it is not an absolute. There are many organisations that function purely on volunteers. Their boards are volunteers and the people who operate on the ground are volunteers, too. Those organisations can operate very adequately. I am on the board of one such organisation that has been operating for about 40 years and has never had a staff member.

Therefore, it is a case of horses for courses; it is not an absolute. Some organisations can operate wonderfully with all volunteers. We do not always need to have volunteer management or volunteer staff to support them. I hope that those comments are helpful.

Thank you very much, Glenn; they are indeed.

As others have, I thank you for everything that your organisations have done during and coming out of the pandemic.

I have a couple of questions about financial stability and sustainability. We have already heard about the importance of multiyear funding being available. We will, I hope, hear more along those lines in today’s budget announcement. I know of cases of health boards having already tried to move towards multiyear funding for mental health charities and drugs services. Does anyone on the panel have examples of that, or of the difference that multiyear funding makes and the additional capacity that it can provide?

I cannot give many specific examples of multiyear funding being implemented. Over many years working in the sector, I have repeatedly seen attempts to do that falling foul of later processes. There might be an attempt to introduce a three-year funding cycle, but there comes the time when there is only one year’s funding left in the budget, then it vanishes and the organisation finds itself fighting to do the same again. The problem is systemic.

There is also something to be said about the language that we use. Quite often we talk about three-year funding, but risk needs to be considered and three-year funding simply makes that happen every three years instead of every year. Three-year funding is great, but is not necessarily consistent with the parity of esteem with other sectors that we expect. My expectation is for rolling grants so that at any time, even in the last year of a three-year grant programme, there is a sense that the organisation will get funding and will be able to move forward and to look a year in advance, at the bare minimum. There is a lot of complexity underneath what sounds like quite a simple concept. Three-year grants that are renewed minutes before the end of the third financial year are not the solution.

I have seen some migration of health board alcohol and drugs partnership funding towards local funding, which is not a bad thing because we are a bit closer to the coalface than the national health service itself, where the partnership is based. There is movement towards delivering services for the ADP where there are clear local gaps.

Mental health support goes along the same lines; need exists, but funding does not, so the onus is put on the third sector to try to find other ways of delivering services. We could say the same about community transport in relation to connectivity for clients getting from their homes to their service providers.

Another thing that was, in a sense, foisted on the third sector is integration joint boards. The theory of the structure is that locality planning groups gather information and feed it up to the integration joint board, where we try to get movement. Things do not necessarily work out that way; it tends to be the case that more comes from the top down. In any case, it is pretty disappointing that the third sector, volunteers and community groups are expected to spend time on that with no resource whatsoever.

That is helpful. My final question is about learning from the pandemic. Last Friday, I visited North Edinburgh Arts. We talked about the new partnerships and new relationships that have been built during the pandemic, and about how to sustain them. That very much comes down to their being able to use the facility of multiyear funding.

We all want additional capacity to be built across Scotland. Do you have examples of how that has been achieved during the pandemic? We have heard already that to some extent people just made things happen. There was maybe movement in terms of risk-averse people becoming involved in things. Are there examples of that? Does Suzie Burt have a local example of that? If others want to come in, put an R in the chat.

From our very local experience, the liberation of removing barriers in order to make things happen was fantastic. We were able to direct our resources and to work together to tackle our local response to the pandemic last year.

Our particular issue was in getting food to people quickly and supporting them through the first stages of the lockdown. We said, “Never mind who you work for and never mind what area you work in. How do we make this work, who has what and who can put what in the pot?” We made that happen very quickly and with very little resource, but it made a huge difference to people. We were up and running before Mr Boris Johnson and Nicola Sturgeon made national announcements. Things happened really quickly.

The other significant thing that helped us on the ground was our organisation becoming a community anchor organisation using supporting communities funding, which has nurtured local partnership working in our localities to make it happen much faster. That has incubated partnerships and made them happen. They are continuing to happen because, as a community anchor organisation, we had access to funding to distribute among partners and to grow partnerships. Access to funding to do things immediately sprouted lots of ideas and made things happen.

We are now trying to do that with community recovery funding, but to a lesser extent because there is not so much funding. However, that makes us collaborate more, and having access to that little bit of resource is absolutely fantastic. Partnerships between local and voluntary organisations, growth in the number of people who want to replicate what communities in our area are doing and growth in community capacity building have come about as a result of the pandemic. I am not sure that that would have happened had the pandemic not happened.

I want to follow up on one of Miles Briggs’s questions. I ask Suzie Burt how much of a challenge it has been to raise funds during the pandemic and how useful multiyear funding would have been during this time.

Letham4All is a very new organisation; we are only three years old. We are run by volunteers but we have some staff who support what we do. The hunt for funding is very difficult. Our experience—it is not unique to us—includes our going through a major capital project that was put on hold for Covid. The funding that we had secured to last through that transformation in our building and for the capital works has evaporated as we have kept doing things through the pandemic and contributing to the local response.

10:45  

We now have to start all over again and look for funding for the next three years after our funding runs out. Looking for money is a constant battle. There is funding out there, but the situation is very competitive. Somebody in the previous panel talked about one of the barriers to partnership working being that we can be in competition with other groups for the same pot of money, which is very challenging.

It would be heaven if there was a multiyear budget—but maybe that is wishful thinking. We have no locality budgets in our communities for doing things through community planning. When money becomes available, we are in competition for a limited pot of money for a lot of organisations.

Looking for money is a difficult challenge. Throughout the pandemic we have been looking for small pots of money through crowdfunding appeals and community pots of money that big businesses—including Arnold Clark, the Asda Foundation and Tesco—have put up. We are continually filling in applications for money to help families to become connected digitally, to get Christmas food parcels out and to get warm jackets and coats for kids in schools because there is no such access locally, which we are working with schools to put in place. Those are some areas in which we have managed to fill gaps. I do not know who would have done that in our area if we had not done it. It is always a challenge.

Before I bring in Pam Duncan-Glancy for the next set of questions, I see that Myles Fitt, Ian Bruce and Glenn Liddall are all looking to come in on that.

I will make this brief. I will make a general point about funding of CAB services, which varies across Scotland. Some are on one-year funding cycles and some are on three-year cycles. Some have sufficient money to provide adequate service levels, but others do not. Stability in funding across Scotland would allow us to embrace the multichannel approach that the service is taking, to ensure that face-to-face services come back as an integral part of what we do and to make sure that we are more than an important service but are an essential community asset. Wider society would benefit from that.

On Suzie Burt’s point about funding, one of the things that I would like to bring to the committee’s attention is the number of mid-sized organisations that we work with that have what one might regard as an excessive number of small grants. Things might be more manageable for everybody if they were funded from a smaller number of large grants. I am talking about organisations with turnover of about £200,000 managing upwards of 12 or 15 grants to get to the required income level.

The difficulty is not just about the application processes that the organisations need to go through and the monitoring that they need to do off the back of that. It is also about the ongoing financial accounting that they have to do at the back end and the governance that they need to have in place to ensure that they are hitting all the targets. That is really challenging and says something about how the sector is funded.

Funding is a huge issue on which I want to make a couple of points. One will build on the point about the huge resources that are expended in getting it. The system is so inefficient. We have at least one full-time member of staff who is constantly looking at funding. Reporting back is also a huge job. That is not to say that we should not report back; of course we should, but I point out that that system is a very inefficient way of doing things.

Our income this year will be heading towards about £1 million; that is from probably about 50 different funders and ranges from grants of more than £100,000 to grants of £500, all of which require reporting. Sometimes in the cold light of day, when we look at a grant and the process to get and report back on the funding, we question whether the funding is a good return on our time and investment. Often it is not. How is it done? It is often done simply by burning the midnight oil; that is how many organisations, including ours, manage.

My final point is about reframing the resource question. We talk about funding and money, but the work that we do is resourced in many ways. I like to think that we are quite good at bringing in resources. We have managed to procure various buildings and spaces on a zero-rent basis. I mentioned volunteers earlier—we have about 250. If we had to pay the living wage for that resource that would come to a colossal amount of money. There is also the cost of our staff team. We also pull in resources on a pro bono basis from various supporters.

My questions are for Myles Fitt and Ian Bruce. You will be aware that a number of citizens advice bureaux in Glasgow faced funding difficulties in the past year or so. Can you tell us about the impact of that and about the importance of resourcing such organisations? Given the UK Government’s changing approach to a three-year funding settlement, do you have any indication from local or central Government in Scotland that they will seek to transfer that approach to your organisations, notwithstanding the fact that three years is good but more would be better?

Yes. Pressure was put on the CAB service in Glasgow. I am not best placed to answer that question, but I am happy to follow up with an answer. However, there were certainly pressures and there was an element of having to establish how the service would be delivered in light of those pressures. I am aware of what went on, but I do not have the exact detail to hand. I am happy to follow that up after the committee session.

Similarly, I would need to come back before giving a lot of detail on this. Certainly, as part of Glasgow City Council’s transition from its old integrated grants fund to the new Glasgow community fund, we saw some organisations—not just citizens advice bureaux but other financial inclusion organisations and wider third sector organisations—either not being funded or being funded at a lower level than previously. That create\ huge challenges in Glasgow. People do not need reminding of the challenges of deprivation in the city, and the context of Covid means that demand for those services has been high.

On the wider question about three-year funding, the UK Government’s commitment is welcome, but my earlier caveats remain. The Scottish Government has made a number of the right noises about the direction of travel on three-year funding. The council’s main funding programme is a three-year programme, but our concern is still about how we ensure that that does not mean the organisation being given a month’s notice at the end of it that it is not being funded from 1 April. We are discussing extensively with the local authority how we make sure that we do not find ourselves in that position at the end of the current round. However, outside of that core funding, there are other local authority grants and contracts in the third sector that are not all consistently three-year arrangements.

I want to return to some of the questions that I asked about TSIs. I wonder what the panel’s view is on how they have operated, specifically in relation to the budgeting. Today we have the Scottish Government budget, but in your own areas have you seen TSIs come to the fore in how we have delivered support for the third sector during the pandemic? I will bring in Ian Bruce for a Glasgow perspective again.

I am happy to come in on that. It has been very interesting. We have genuinely felt that the strategic value of what we do rather than the operational value of what we do has been appreciated during Covid. TSIs have always had a key role in representing the sector locally and building capacity around organisational development, social enterprise and volunteering. However, during Covid we have seen people recognising that TSIs are well placed in terms of their understanding of what is happening in the sector at a local level, their knowledge of the sector at the local level and their relationships with the sector. We have started to see that play out.

We are seeing a dramatically improved relationship with the local authority in the city, and the tone is much more about regarding us as a partner in addressing some of the city’s challenges and making sure that we take advantage of the opportunities that come in our direction. That stands out for me.

As you asked in the previous panel, TSI funding is just over £8 million a year nationally. That has remained static in cash terms for I think 11 years now, or at least 10. Members may be aware that it is also the case that the distribution of that funding nationally is not as equitable across local authority areas as you might expect. As a comparison, in Glasgow, where the local authority would expect to receive in the region of 11 to 13 per cent of the Scottish Government’s spend for its activities, the TSI receives 5.5 per cent of the national Scottish Government funding. That results in TSIs across the country having different capacities to respond to local needs.

Does anyone else want to come in on that?

One of the points that I want to return to is what Glenn Liddall said earlier about connect four. Looking to the future and the potential reform or improvement of TSIs, how do you think that we can achieve that? As you outlined, how we bring the four sectors together is important and, where there are examples of that, that is important. Could we look towards TSIs potentially helping to achieve that?

Thank you for inviting me to speak. My experience of TSIs varies dramatically across the country. There are fantastic examples of TSIs and fantastic examples of the work that takes place, but there are also cases where TSIs could make substantial improvements in how they operate. To preface my answer, TSIs are starting from different points and different places in terms of their current capacity. Some TSIs are well equipped and are well positioned to start to build and develop those further arrangements.

Generally speaking from my experience, TSIs tend to be relatively well connected with the public sector and the local authority, but less so with the NHS. It takes two to tango and often the NHS does not know where or how to engage with TSIs. That is a challenge.

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In terms of the business world, from my experience again, the focus is on social enterprise, which is fantastic. We use a social enterprise model and approach to some of our work, but sometimes the connections with wider business—I am thinking of chambers of commerce and so on—are not as strong as they could be. There is work to be done as well on connections with academia, universities and colleges. I hope that that is helpful.

I will give a practical example of where we were doing that. During the pandemic, we worked with the University of Glasgow to set up a pilot project called the collaborative, which was about connecting the third sector with academia. A report on the success of that has recently been published and I would be happy to share it with the committee after today.

We have done some other interesting work, such as a consultation on the national care service. We have been working closely with the University of Strathclyde, third sector organisations and independent providers of social care to look at the implications that that has for the city and how we had best respond to it, at the same time as working with our public sector partners to look at the implications for Glasgow. A lot of that is definitely in scope for us.

Finally, Suzie Burt, your organisation has established itself during the pandemic. Do you feel that the public health emergency let the third sector in but that it is now being pushed out again, or that barriers are being put in place that were not there before or were taken down during the pandemic? How do we prevent that? A lot of organisations that responded fantastically during the pandemic are now finding that they are not being listened to or that they do not have the same relationship with statutory bodies that they had before. What is your opinion about that? That question is open to anyone else on the panel as well.

We work very well with our local authority. There are mutual benefits. I would probably say that we can sometimes be of more benefit to our local authority and its support teams than they are to us. We have very little contact with our health and social care partnership. Considering that our initial work is all about health and wellbeing in our communities, that is quite sad, and we do not know where the door is to get in. That is all that I can say on that one.

I agree with that. The Westerns Isles example is that it took us a wee while to establish ourselves as a player and a partner in the emergency planning side of things. We brought quite a lot of issues to the fore, but it took us a while to be accepted, a lot of which was to do with things such as confidentiality. Once we got those barriers out of the way, however, we were accepted as good partners. Since then, I have seen some good working and some more inclusive agendas, so the pandemic has brought a good few of us closer together, and I hope that that continues.

A lot of funding comes from councils. Can you highlight any good practices by councils in their financial support to the third sector? I will put that first to Myles Fitt and then to anyone else who wants to comment.

I cannot give you any details on this other than a general statement that the councils fund local bureaux. The relationships are good in some areas but less so in others. The level of funding will vary across Scotland. There are partnerships that go on, but I do not want to give any detail at this stage because I do not want to give you the wrong information. I am happy to follow up with the committee afterwards.

I can speak only from our perspective as a charity. We set up projects and services often with multiple streams of funding. Often there will be public sector funding, whether that be through a local authority or through the NHS, but we always put that together with other funding from the trusts and foundations, the lottery and some of the household names of big funders that you all know. Often funding can unlock matched funding. Often a local authority will think, “If we fund this, that will build and add capacity.” Likewise, if a local authority or the NHS has funded an initial piece of work and we can gather additional funding, that builds capacity.

The question started by saying a lot of funding coming from the councils, but I make the point that a lot of funding comes from elsewhere. I also make the point that resources in the shape of our volunteers, interns, placement students, spaces, buildings, pro bono support and support from universities can be very real and quite sizeable.

I just want to highlight that, in the Western Isles, the funds that the council has worked on with the community through the local wards include Crown Estate funds. Our communities have had good access to the schemes that have been rolled out so far.

I have two quick questions. My question to Ian Bruce is similar to one that I put to the other panel. Looking at lessons learned from last year, do you think, from talking with the people you are involved with, that the money that came from the Scottish Government and the UK Government got down to the charities that were dealing with the most need on the ground? Did you hear any stories about funding being blocked by the larger charities or not getting to the people who were actually doing the work?

I will start by making it clear that, all things considered, given the pace that everything happened at, it worked very well. I will highlight a couple of areas where we think that things might have been a little bit more effective, but I am aware that this is said with the benefit of hindsight.

We found, when we spoke to them, that some local organisations were excluded. I do not think that it was deliberate; it was done with very good intentions. Compared to the rest of Scotland, Glasgow has a very high black, Asian and minority ethnic population, but many of the organisations that are best placed to reach that population are very small and volunteer led. The Scottish Government’s wellbeing fund required a minimum grant of £5,000, which in itself seems very reasonable, but it also required that applicants apply for no more than 25 per cent—I hope that the committee can forgive me if that is not the right figure—of their normal annual income. That meant, if my maths is right, that organisations with an income of under £25,000 were excluded from applying, and the overwhelming number of those BME organisations fell into that category. Later interventions tried to address that.

Secondly, there were not necessarily any other huge gaps in organisations getting money, but we saw that the approach, which was probably necessary at the time, did not result in the best use of money and the best coverage of the city. We got a little bit of feedback from some communities that, for example, people were getting multiple food parcels delivered from different providers. We should reflect on how in future we take more of an emergency response approach rather than one that is in effect a faster version of the usual grants programme. However, I want to triple emphasise that all these things are easily said with hindsight.

That is helpful. I am very conscious of time, so I ask for brief answers to my next question. The issue of your organisations’ relationship with OSCR and the reform of charity law is likely to come up within the next five years. Are there changes that you would like to be made? Is the system overly bureaucratic, in relation to the number of forms that you have to fill in, or is it about right?

I will give a quick answer from our perspective. I do not find the reporting back to OSCR to be overly burdensome. As an organisation, we have grown quite dramatically, and the accounting rules have changed dramatically, which has been a challenge. In our first year, our accounts totalled about £5,000, but the total for the accounts that we are just about to sign off is heading towards £1 million. The reality is that there are now more accounting processes, auditing and so on in the process, which is, of course, as it should be.

I am a great advocate of Scottish charitable incorporated organisations. A lot of people and charitable organisations still do not realise the benefits of being a SCIO, which allows an organisation to be registered as a charity as well as a company. There could be more work to promote SCIOs.

Suzie Burt, how has the relationship been for you, as somebody who has recently started a charity?

When we were getting support from OSCR in setting up, we were a bit worried about timescales, but we found the whole process to be very quick. The reporting process for us is not burdensome; it is very easy for us to do it and to put it online. The process is very transparent for our members and the community.

Our organisation, like Glenn Liddall’s, is growing, and we realise that our governance and accounting requirements will increase, but we will adapt to those as our organisation grows. So far, we have not found our work for OSCR to be overly burdensome at all.

I thank the witnesses for their helpful contributions so far. My questions are on recovery and renewal. You have spoken about some of the issues in your previous answers, but how can we ensure that the third sector is at the heart of social and economic recovery? What can local authorities and the UK and Scottish Governments do to ensure that that happens?

A number of things stand out for me. It is important to recognise the third sector’s role in economic recovery. There is currently a consultation on the Scottish Government’s economic strategy, and I feel that it is the first time that the third sector has been seen as an economic force in its own right, which is positive.

First and foremost, there should be a focus on the local. When we talk about “local”, people’s thoughts often drift to local authority areas, but, in a city the size of Glasgow, for example, “local” means something much closer to home. My sense is that the closer down into communities we get, the more obvious the role of the third sector becomes. When we look at things in the abstract, or in a national or regional context, it becomes easy to ignore or forget the third sector’s contribution. When you live in the Gorbals, as I do, you see the daily impact of third sector organisations on the lives of people in the city. We need to think about how we plan services and commission things at a local level, and how we ensure that the third sector is best placed to participate.

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Suzie Burt is looking to come in. You will need to be brief, if that is possible, please.

I make a plea for some kind of plan. We are working hard on the ground to support people to recover, in relation to their mental health, their health and wellbeing, their employability and all other aspects of their lives. We are going on our gut knowledge and our knowledge of our community, but we do not see how that feeds into a recovery plan for our area. There might be a role for a local TSI or for community planning, because there is nothing that pulls us together and ensures that we are not duplicating services, so that we make best use of recovery resources.

Glenn Liddall, Ian Bruce and Myles Fitt would also like to make very brief contributions.

I will repeat some of the things that I said earlier. I will make three points. First, we need to get away from silo funding—I see that people are nodding already, so I do not need to elaborate on that point. My second point relates to what I call the first-aid approach. There is often a lack of opportunity or desire to genuinely change things at the system level.

That feeds into my third point, which relates to the power dynamic and parity of esteem. How often do people see the third sector in a position of leadership? Often, the third sector is seen at best as working with the public sector. When we are asked, we sometimes come up with things that were not expected or were pushed to one side because it was not quite the right answer. That feeds into the issue of power dynamics and parity of esteem. If we want collaboration and partnership working, that has to come from both sides. People need to be prepared to change and modify their views, opinions and outlook; it is not a genuine partnership if both sides are not prepared to change. We can think about what makes personal relationships work—we have to have a bit of give and take.

On the economic strategy and the third sector’s economic contribution, earlier I touched on how organisations such as CABs can bring in volunteers and give them the right experience so that they can go into the workforce and make a contribution to the economy.

The CAB service also helps people to unlock money. Last year, £147 million was unlocked for people through the advice that we gave. That money goes back into the economy of the local community, so the third sector plays a valuable role not just in providing a service but in contributing to economic recovery. It is important that the third sector stays fully involved in that. Across the third sector, there are many other examples of economic and financial output going back into the community.

Social and economic renewal has to start at the community level—right at that baseline. The third sector has a big role in driving that work forward, possibly through social and economic forums that include partner agencies and local authorities.

I have a final quick question for Myles Fitt. How can we ensure that there is partnership and co-operation in the third sector if organisations are constantly competing against one another for funding and contracts? Is there a more holistic way of looking at the situation?

I think that there is—that is my general response. I cannot give a proper answer at the moment, but I will follow up with the committee. There should be a recognition that the organisations involved are seeking the same outcomes, so they should be able to focus on those. Resources should be aligned so that we get to the best outcome, but there should be a recognition of the role that each individual partner plays. That is my basic answer to the question but, after the meeting, I am happy to follow up with a bit more detail.

That would be very helpful. I am sorry to say that we are at the end of our session. If any witness wanted to say anything but did not manage to say it, we would be keen to have that evidence in writing. I would be keen for you to provide your views on digital exclusion, for example. How challenging has accessing digital services been for the people to whom you are providing services? Have your organisations’ platforms been able to support your members and facilitate the services that you are providing? Could the Government and local authorities do anything further to support that work? It would be helpful to get answers to those questions.

In the meantime, I thank all the witnesses for their time and for the work that they and their organisations have been doing during the pandemic and as we come out of it. It is greatly appreciated.