Local Funding Survey Highlights Long-Term Funding Issues for Third Sector in Scotland

SCVO - In this report, SCVO demonstrates the many difficulties and intricacies of local funding for much of the third sector. Most of the funding issues faced by the sector arise whatever type of funding the organisation is seeking: grant funding, a service level agreement, or a contract. Similarly, these issues arise for organisations regardless of whether they are working with local authorities, health boards, or other local or regional public funders. Read full article and report here.


When it comes to local funding from public bodies, the sector suffers from short term, small pots of money, with long-term funding in the minority; this can have real impacts for individuals and communities. The sector still does not always get the support it needs, and funding processes and monitoring can still seem unduly long and burdensome. There is some good practice across Scotland – showing that there is a better way to operate – and this needs to be the norm rather than the exception.

In brief:

  • If the funding situation for the sector continues as at present, much of the sector will be unable to continue its work – leading to a loss for communities and individuals across Scotland and beyond.
  • All local and regional bodies must improve their processes and their funding systems so that the third sector can function to the best of the ability, delivering the aims that its organisations exist for.
  • Currently, much time and energy is expended by organisations on seeking funding to stay afloat. This is time that could be better spent on achieving an organisation’s aims – delivering for communities – were money not an issue.
  • Much funding does not allow for long-term projects or planning, meaning regular stress and upheaval for organisations, communities and individuals.
  • It is not, generally, large pots of money that are required, but rather a change in funding terms and processes – including recognising full projects costs and core costs. Supportive staff at funder organisations can also help here.



Funding processes

  1. More must continue to be done to simplify all application and bidding processes wherever possible. Forms and processes should be standardised wherever appropriate.
  2. Full support should always be available to applicants to help them through the application or bidding process. Useful and timely feedback should be provided as a matter of course.
  3. Information across funders and commissioners should be pooled where appropriate, to ensure that the third sector is not unnecessarily repeating information that has already been shared.
  4. Shared learning on best practice amongst funders and commissioners would be beneficial.
  5. The third sector, working alongside funders, should ascertain whether it would be both useful and practical to create a single point where third sector organisations can apply for grants.
  6. Where consortium bids are encouraged, support should be given, particularly to small organisations.

Funding terms and conditions

  1. The most appropriate form of funding mechanism must be used for each situation; open tendering processes should only be used when appropriate.
  2. Minimum wage costs and uplifts, and inflationary uplifts, should be provided as a matter of course wherever applicable.
  3. Funding levels must match the service levels required, and core costs must be taken into account when calculating funding.
  4. Funding should cover periods greater than a year for continuing services and projects – preferably three years – in order to provide stability to those the sector supports.
  5. Whatever the grant or contract length, funding should never be withdrawn ‘out of the blue’. Neither should funding be reduced because an organisation has raised funds elsewhere.
  6. Monitoring and evaluation should be kept to a level commensurate with the amount of funding/size of agreement applied for.
Centre for Scottish Public Policy
c/o Digby Brown LLP
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