Hansard

I welcome the debate and I pay tribute, as others across the parties have done, to all who work in the third sector. It is a reality that, without the third sector and its organisations, Scottish society and our economy would be much poorer. Indeed, across many parts of the public sector—particularly in areas such as health, social care or education—were it not for the contribution of third sector organisations, the Government would not be able to deliver many of its policy objectives.

I could namecheck many organisations, but I will restrict myself to one, because I visited it very recently: the Strathmore Centre for Youth Development in Blairgowrie—SCYD—which does so much good work for youngsters who need support. It celebrated its 25th birthday just last month, and I had the privilege of attending to see, once again, the excellent work that it does.

As has already been said in the debate, the third sector is full of individuals who are working hard with very limited resources. Many organisations depend on volunteers, whom we should salute for giving up their spare time to help others. That is a contribution of incalculable benefit to the Scottish economy.

However, the reality is that the third sector is in crisis, as anyone who engages with it will testify. According to Third Force News, 81 per cent of charities and voluntary organisations face financial challenges, while the Scottish third sector tracker has found that charities face a triple threat of rising demand, falling income and rising costs. In the meantime, the Scottish National Party Government has cut third sector funding in real terms. The amount of cash has fallen by £177 million in real terms—5 per cent of the total—between 2021 and 2023.

Today, the cabinet secretary has talked about a new third sector partnership agreement, and we look forward to hearing more about the detail of that, as will those in the sector. There is certainly a case for a reset and a new approach in respect of a number of different issues.

First, I will address the question of funding. The overall quantum of funding is important, but it is only part of the story. The number 1 issue that we hear from organisations—we have heard it already in this debate—is the issue of security of multiyear funding. Over the years, I have met too many bodies that complain of a hand-to-mouth existence and rely on year-to-year financial settlements. I can quote examples of organisations that are already well into the new financial year before they even know how much cash they will get in funding. That makes life extremely difficult for managers, those who organise financial projections and staff who are working without any ongoing job security. That means that those organisations regularly have to issue redundancy notices. Inevitably, that leads to experienced and valuable staff looking for jobs elsewhere, to try to get job security, while they await decisions from the Government, local authorities or other public agencies.

I heard with great interest what the cabinet secretary has had to say today about multiyear funding. However, we have been hearing that for more than a decade, and it has not been delivered. The SNP had a previous commitment to deliver fairer funding by 2026—by this year—but, so far, all we have seen is a pilot scheme worth £130 million over two years. That is the biggest single change that would make a real difference to the sector. Holly Bruce made an important point about the amount of money that the sector would save if that multiyear funding was put in place, because the sector would not have the administrative cost of issuing redundancy notices and potentially losing staff as a result.

In her response to my earlier intervention, the cabinet secretary said that the Scottish Government does not get multiyear funding from the UK Government. Undoubtedly, that is usually the case, but we know the Scottish Government’s budget—we know, overwhelmingly, what the value of it will be—and, although there are in-year revisions, inevitably those in-year revisions put the budget up, not down, so I think that there is much more flexibility in relation to the solutions that the Government could find.

We also need to ensure that third sector groups that are in receipt of Government funds do not then feel bound to support Government policy—a point that is referenced in the Liberal Democrat amendment. I am sure that members will recall when my former colleague Douglas Ross introduced the Right to Recovery (Scotland) Bill, which was supported by many working in the drug and alcohol sector. However, some leading organisations that were heavily dependent on Scottish Government funding came out and opposed the bill.