Bank of England Consults on Economic Challenges for Sector

A round table discussion was held between GCVS members and a representative of the Bank of England to examine the economic challenges caused by Covid and specifically the impact on third-sector organisations. Attendees at GCVS’ Albany building were invited to come and share their experiences with Will Dowson, Agent for Scotland at the Bank of England.

What prompted this discussion?

Supporting the economy’s recovery from the effects of the pandemic is crucial for policymakers, including the Bank of England, to help organisations to recover and rebuild. However, the impact of recent events in Ukraine, rocketing fuel prices, high inflation and increased living costs have all added additional challenges and strains on our society. For many, the difficulties facing both the third sector and the wider community are unprecedented.

To explore these challenges further, GCVS were pleased to open a dialogue with those representing organisations from all spectrums of the community. In Will’s role as Agent for the Bank to gather feedback on economic performance, he was interested to hear from those on the ground, and in communities who often go unheard, to gain new perspectives to be considered during future policy decisions. He recognised to the group that “We face a cost of living hit that most of us can’t recall in our living memory” and emphasised how key it was to be having this discussion at such a difficult time for many.

The discussions explored the impact of the last 2 years in terms of the economic and financial challenges faced by organisations and the communities they work with. However, thoughts quickly moved to the more recent and immediate threat of rising costs which are the biggest concern for many.

The urgency of the situation was clear from Laura McMahon at Drumchapel Citizens Advice Bureau who said:

“Our clients are struggling now, they don’t care what’s coming in the future. It’s about heating, travelling to work, staying in work and keeping afloat.”

 

What were the challenges facing organisations?

The group highlighted a wide range of challenges currently facing organisations operating in Glasgow’s third sector. To summarise the key points, these included:

  • Increased costs – utility bills, national insurance contributions and pay increases for staff are difficult to manage within existing budgets, often where grant income hasn’t risen in line with inflation.
  • Depleted reserves – responding to Covid has left many financially drained. Looking forward remains difficult with unpredictable funding for many organisations.
  • Recruiting and retaining staff – as pay increases in the public and private sector, it becomes increasingly difficult for third sector organisations to recruit and retain staff, or recognise the contribution staff have made during Covid.
  • Unrecognised impact – the economic contribution of the third sector is difficult to measure in traditional productivity terms, while the social impact of the sector is often undervalued.

What are the most crucial issues in communities?

When sharing the experiences of those they support, organisations highlighted these points:

  • Immediate need – inflation and rising energy prices are causing the biggest concern. For those already struggling, many now face dire circumstances.
  • Inequality – many felt those in disadvantaged sections of society feel unheard, ignored and left-behind.
  • Less resource to go around – increased demand on services means waiting lists are longer and resources – such as food banks – are more stretched.
  • The Digital Divide – seen as a further disadvantage, particularly felt by those communities that already face disadvantage.

Ian Bruce, GCVS Chief Executive spoke about the ‘social crisis’ we are witnessing following recent discussions with many organisations who face increased costs and demand, despite depleted funding. He said:

“Our members, and the people they support, increasingly face impossible financial choices. It is critical that policymakers like the Bank of England hear about what is happening on the ground before they take decisions that impact on real lives.

It is third sector that often picks up the pieces when people fall through the cracks. As more people are going to struggle, the sector now desperately needs to be recognised and resourced fairly”.

 

Looking to the future

Mr Dowson expressed his thanks to the group, and GCVS, for allowing him to listen to their concerns and better understand the needs of the sector. He concluded:

“Listening to GCVS Members share how their organisations and those they support respond to the impact of COVID and the rising cost of living provided valuable – and humbling – insights to the many challenges people already face. It’s important the Bank of England understands these challenges as it seeks to achieve its role to return consumer price growth to lower and stable levels.”

While this meeting couldn’t offer any immediate reassurances for those struggling, it did close with a sense of positivity at having a channel for conversation. Further opportunities are already being planned to continue discussions with the Bank of England and other key policy and decision makers. The response from those gathered was that continuing to build open communications will enable us to work towards better economic stability and bring to the forefront those who are struggling most.

Bank of England meeting


At GCVS we will continue to drive and facilitate opportunities for those we represent to have their voices heard. We are grateful to all who were able to share their time and experiences in this meeting, and to Mr Dowson for taking our views forward for further consideration.

If you would like to discuss the challenges your organisation is having, please get in touch or share your experiences on Glasgow Mighty Networks. You can also read more on our interview with BBC Scotland on the struggles facing the voluntary sector.

 

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