UPDATE:

Information from WCVA: WAG Draft Budget

Dear Colleague,

In November we wrote to you jointly with Ministers about the budget and promised to provide a more detailed breakdown of the budget lines relevant to the third sector. This is now enclosed and shows the 'winners' and 'losers' in terms of budget lines. Many of the increases and cuts are modest and the exact impact on an organisations grant may not precisely follow the budget line. Some budget lines may increase or decrease for purely technical reasons.

Revenue budget lines which have increased include Welsh language, rural development, strategic regeneration areas, climate change, health, financial inclusion, children's & adult social services and strategies and substance misuse funding. Most capital budget lines have received large cuts.

Revenue budget lines which have decreased include Communities First, refugees, asylum seekers and migrant workers, independent living, international development, arts, sports, museums, animal welfare, homelessness, waste, social enterprise, third sector, sustainable development and sustainable travel.

Significant capital reductions have been applied to Communities Facilities and Active Programme, Housing and Social Enterprise.

Some budgets have stayed the same (ie zero increase or decrease). These include hospices, domestic abuse, digital inclusion and community cohesion.

Welsh Assembly Government officials should now be in a position to explain the impact of the budget and discuss indicative allocations, not just for the next financial year, but for the two subsequent years ie 2011/12, 2012/13, 2013/14. Ministers will also be considering the overall impact of their decisions on the third sector in January 2011 and if you wish to feed information into this assessment please do so via your normal government contact.

At a local level, the Local Government budget settlement announced on 23 November 2010 was judged as 'good as it gets' by local authority representatives, as it contained revenue rises in 2012/13 and 2013/14 of 0.2% and 1.3% respectively, after a reduction of 1.4% in 2011/12.

This means that authorities need not make major cuts to third sector budgets as a result of the Welsh Assembly Government budget settlement, particularly in the areas of social services and education.

However, WCVA's Recession and Recovery survey, has reported that third sector organisations are seeing funding from local authorities reduce, resulting in significant cuts in their service provision. In other cases, organisations are reporting services, that they were funded to provide, being incorporated into the local authority's mainstream service provision, resulting in a decline in the total service delivery capacity for service users.

If there are seemingly unwarranted cuts in third sector funding imposed by local government then organisations may want to raise any of the following questions with officials:

• How was the decision made? What evidence was considered?
• What are the opportunity costs of the decision? Will it end up costing more in the
  longer term?
• How many people will be affected?
• Do the people likely to be affected come from a vulnerable or disadvantaged group?
• Will the service continue to be provided in-house? If so, is there a business case to
  support this as the most efficient and effective means of delivery, and the best option
  for citizens who use the service?
• Has an objective decision been made in order of priority based on outcomes and value
  for money?

Again, dialogue with your local authority contacts or through the County Voluntary Council will be critical as local authorities prepare their budgets and again WCVA and your local CVC will be anxious to know about both good and bad practice over these critical next few weeks.

I do believe that we can look forward to 2011 with a degree of optimism as there will remain many exciting opportunities and challenges. Many of these were brought together in the First Ministers speech at WCVA's recent annual conference in Cardiff.

Finally, on behalf of everyone at Wales Council for Voluntary Action may I wish you a happy and warm Christmas and New Year and thank you for all the support you have given us in 2010.

Yours sincerely,

Graham Benfield, OBE
Chief Executive

Win Griffiths
Chair