SCVO Scottish Third Sector Statistics 2012

Transcription

1 SCVO Scottish Third Sector Statistics 2012 The Scottish third sector touches the lives of people and communities across the country. It encompasses an estimated 45,000 voluntary organisations, of which around half are registered as charities. From small grassroots organisations active in sports, childcare, self-help and the arts to village halls, housing and major social care providers, the third sector plays a key part across all walks of Scottish life today. This report looks at the financial health of the sector during , and examines key trends. Key statistics Figures compare 2011 to Annual income up to 4.5 billion in 2011 Expenditure up to 4.3 billion Staff numbers increase to 138,000 Full Time Equivalent employees down to 83,350 Staff costs remain at 1.93billion Assets rise to 8.6 billion Assets of smaller charities shrink Majority of smaller charities spend more than their income (Source: SCVO 2012) Insights The third sector is employing more people, but on less hours. There is less money available to meet staff costs, but rather than shedding jobs, the sector is reducing hours for staff. Major deficits for many of our sector's smaller charities is masked by modest return to income growth for larger charities and housing associations. Growth in assets held by housing associations and other large charities make it look as though the sector's reserves are healthier than they are really. Smaller charities have got less cash reserves in the bank to fall back on as income sources dry up. (See final conclusions for more detail)

2 Actual Annual Income bn / year Income and expenditure Income growth of the regulated third sector The total annual turnover of the regulated third sector in 2011 showed slight growth, despite the difficult financial climate. In the past decade, the third sector s growth significantly outstripped inflation due to factors such as increased public service delivery and housing stock transfers. Now however, the sector is only just keeping ahead of UK inflation. Third sector annual turnover (actual against expected) Actual annual income 4.1bn 4.36bn 4.36bn 4.52bn Expected growth based on inflation 4.1bn 4.26bn 4.24bn 4.44bn Growth above inflation n/a + 100m (+ 2.29%) + 120m (+ 3.75%) + 80m (+ 1.77%)

3 Third sector annual turnover breakdown by organisation type 5,000,000,000 4,500,000,000 4,000,000,000 3,500,000,000 3,000,000,000 2,500,000,000 2,000,000,000 1,500,000,000 1,000,000, ,000, Credit Unions 22,900,000 25,500,000 25,899,242 29,787,762 Charities 3,062,770,203 3,217,787,214 3,121,829,460 3,206,488,939 Housing Assocs 987,000,000 1,120,018,800 1,211,031,000 1,278,865,000 TOTAL 4,072,670,203 4,363,306,014 4,358,759,702 4,515,141, was a year of mixed fortunes. Overall, the majority of organisations in the sector saw their income continue to grow. Despite costs also rising, many managed to make a surplus. Housing Associations and larger charities in particular were in general able to generate surpluses. Although the sector overall saw a small increase in income, it should be noted that the turnover of charities billion - is still lagging behind the 2009 figure of billion. Across the board there were also many charities that for a range of reasons saw a sharp drop in income. These include some larger players that lost contracts and some big trusts who earned less interest on their investments. Also of concern are the many smaller charities that spent more money in 2011 than they generated, meaning that taken as a group they overall ended up in deficit. It is to be expected that in harder

4 economic times many groups dip into the assets they have set aside, but any continuing overspend at this level will have implications for the sector s sustainability Income and expenditure Income ( bn) Expenditure ( bn) Under 12,500 12,501 to 25,000 25,001 to 50,000 50,001 to 100, ,001 to 500, ,001 to 1,000,000 1,000,000 to 5,000,000 5,000,000 to 10,000,000 % of organisations making a profit or loss in 2011 by organisation size Over 10,000,000 Housing Associations -60% -40% -20% 0% 20% 40% 60% 80% 100% Profit Loss

5 Staff costs Staff costs were around 1.93 billion in Despite some organisations seeing an increase in their staff numbers and costs, many organisations had to cut back on the amount spent on staffing. Staff costs peaked in 2009, but part of this was down to redundancy and restructuring costs. Pay freezes, reduced hours, redundancies and cut backs in other staff costs such as pensions, training and travel saw a sharp drop in staff costs in 2010, levelling off in The 1.93 billion spent on staffing and associated costs made up 45% of the sector s expenditure in This is a drop from 2009, when staff costs made up 51% of all expenditure, showing that although charity spending has continued to increase in recent years, a smaller proportion is being spent on staffing. Note that this overall figure averages out the many thousands of charities who have no staff with organisations such as large social care providers where staff costs often account for over 80% of all expenditure. Wages make up almost 90% of all staffing-related costs. 2,500,000,000 Staff costs ,000,000,000 1,500,000,000 1,000,000, ,000, Staff costs breakdown % 3% 7% Wages Other Staff costs Pensions 89% National Insurance

6 Workforce There was a very slight increase in the number of people employed in the sector between 2010 and 2011, with the total headcount rising to 138,000. However, looking at the number of sector employees taken as Full Time Equivalents (FTE) we can see that there has in fact been a 10% drop in staff hours between 2009 and 2011 which is reflected in the drop in staff costs. The increase in staff headcount but decrease in FTEs can be explained by an increase in part-time, short-term and lower paid employment. Third sector workforce Headcount FTE 119, , , , ,000 73,000 83,500 93,000 85,500 83, Organisational activity and share of income The following table offers a comparison between the numbers of organisations in each area of activity within the third sector, compared with that area of activity s share of the sector s total income. One striking feature is that although the 200 housing associations make up only 1% of the sector, they account for nearly a quarter of the sector s turnover. Health also accounts for a slightly larger share of the income than its share of organisations. The other large sub-sectors Community and Social Development, Culture and Recreation and Social Care all have a smaller share of the income relative to the number of organisations working in their field.

7 Field of work Share of organisations Share of Income Community & Social Development 19% 10% Culture and recreation 18% 10% Education and research 5% 7% Environment & Animals 3% 4% General Charitable Purposes 2% 3% Health 6% 9% Housing 1% 24% Law, advocacy and politics 2% 2% Social care 43% 31% The table below shows the distribution of incomes across the sector. The largest 4% of organisations account for 79% of the sector s income, while 68% of organisations have incomes under 25,000 but only account for a 2% share of the overall income. This skew in income share has become even more pronounced in recent years. 90% 80% 70% 60% Income Distribution % 50% 40% 30% 20% 68% 16% % of organisations % of Income 10% 0% Small: Under 25k 2% 16% 3% 12% 4% Medium: 25k - 100k Medium-Large: 100k - 1m Large: over: 1m Assets The sector s net assets grew by 4% between 2010 and 2011, increasing from 8.6 billion to 9 billion. These overall sector figures do not tell the whole picture, and if we break assets down by organisation type we can see that asset growth is being driven by housing stock.

8 In the graphs and tables below, housing associations show significant increases in their assets, up 22% from 0.96 billion to nearly 1.2 billion in The rest of the sector saw their assets rise in value by only 1.7%, well below inflation which was 4.5% for 2011 (Consumer Price Index). Sector assets in 2010 and 2011 SECTOR (Excluding Housing Associations) Housing Associations 961,000,000 1,176,000,000 7,676,000,000 7,806,000,000 Net Assets 2010 Net Assets 2011 Sector assets increases between 2010 and ,000,000,000 8,000,000,000 6,000,000,000 4,000,000,000 8,637,000,000 8,982,000,000 2,000,000,000 - Net Assets 2010 Net Assets 2011 Increase Housing Associations 961,000,000 1,176,000, % SECTOR (Excluding Housing Associations) 7,676,000,000 7,806,000, % NET ASSETS OF SECTOR 8,637,000,000 8,982,000, %

9 If we break down assets by organisation turnover, we can also see that the sector s assets closely follow the deficit/ surplus patterns seen above in the income and expenditure section. Smaller organisations, which as a group tended to make a deficit in recent years, have been eating into their assets and have seen substantial decreases to their assets between 2010 and Larger charities show increases overall. It is worth repeating that this grouping into income bands is useful for revealing general patterns, but that the figures hide the fact that many large charities saw incomes and assets drop, and many smaller charities experienced strong growth. 250,000, ,000, ,000, ,000,000 50,000,000 - (50,000,000) (100,000,000) (150,000,000) Net assets - decreases/ increases between 2010 and 2011 Current and fixed assets The total assets of the sector in 2011 come to an estimated 13.1billion. One fifth of the sector s assets are made up of current assets, worth an estimated 2.3 billion. These assets are primarily cash, plus debtors, stock and short term investments. The sector s fixed assets make up the other 4/5 th. This includes tangible fixed assets such as buildings and equipment, and the many community assets looked after by organisations such as village halls, theatre and arts venues, housing associations and

10 community land groups. The other key part of fixed assets is long-term investments, such as the funds held by large grant-giving trusts. Sector assets and liabilities 2011 ( billion) Current Assets 2.3 Fixed Assets Liabilities It should be noted that the 10.7billion worth of investments and buildings etc. cannot be regarded as ready cash that the sector is sitting on, but are primarily community assets and funds held in long-term trust by the sector, and managed sustainably by charities and other bodies on behalf of communities across Scotland. The sector has liabilities of 4.1billion, including short- and long-term creditors, which are taken off the total assets figure to get the net assets figure of 9 billion. Final conclusions There has been a slight increase in the total number of third sector jobs to 138,000. However, there has been a significant drop in staff hours (around 10%) with fewer people now employed as full-time workers, and a matching drop in staff costs. What this means is that the sector, constrained financially, is making cost savings by employing people for less hours rather than shedding jobs, a trend which matches the wider labour market. The sector's annual income, having stalled between 2009 and 2010, has now increased slightly to 4.5bn. What this hides however, is major shifts in the balance of incoming resources between large housing associations and smaller charities and service delivery charities. The surpluses for some of the larger housing associations and household name charities tend to mask major deficits for many smaller organisations and even some of the larger charities that have lost contracts, and are forced to dip into ever shrinking reserves. The sector's overall assets and reserves have increased slightly to 9bn, but again increases in assets now owned by some of the larger charities and housing associations is hiding substantial erosion of assets for smaller organisations. Much of the sector's assets remain tied up in restricted investments, buildings or land.

11 Methodology There are an estimated 45,000 voluntary organisations currently operating in Scotland. This report focuses on data from the 19,483 regulated third sector organisations. Total turnover figures for charities, housing associations and credit unions have kindly been provided by the Office of the Scottish Charity Regulator, the Scottish Housing Regulator, and the Association of British Credit Unions respectively. Income breakdowns, expenditure and assets figures are based on weighted data from the SCVO Panel. The 2012 Panel consists of the analysed financial accounts of 1,005 third sector organisations. In addition, this research report uses data from the SCVO database of over 20,000 Scottish third sector organisations to provide field of work breakdowns based on the International Classification of Non-profit Organisations (ICNPO). This factsheet does not include: Charities operating across the whole of the UK, as most of these charities do not produce separate accounts for their Scottish activities. Charities not regarded as part of the third sector for the purposes of this research, including universities, Local Authority-led bodies such as leisure trusts and urban regeneration companies, churches and private schools.