The Voluntary Sector Can Play a More Important Role as the Recession Bites Anddemographics Alter; Is the Recession a Time of Financial Crisis or Golden Opportunity for the Voluntary Sector and the Vital Services It Delivers to Communities across Wales? Jonathan Davies of the Welsh NHS Confederation Investigates

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Byline: Jonathan Davies

THE importance of the voluntary sector in working in partnership with public services to care and support people in our communities has been recognised for a long time.

But as the recession bites and there is a great deal of speculation about sweeping cuts in public sector funding, there is also concern about the effect this will have on the voluntary sector and the services they provide.

But there is another way of looking at this. If the voluntary sector has the advantage of being more effective and flexible in providing certain aspects of care, then maybe we can turn the pressure on public funding into a virtue. Perhaps now more than ever, the voluntary sector can play an even greater role in the planning and delivery of community services. Perhaps the current circumstances provide us with an opportunity too good to miss.

In John Mohan and Karl Wilding's article on the History and Policy website - Economic Downturns and the Voluntary Sector: What Can We Learn From Historical Evidence - the authors say that the confirmation that the UK economy is now in recession has prompted speculation about the effects of an economic downturn on charitable giving and the voluntary sector with several commentators predicting a potential financial crisis.

They assert that the evidence cited in the current debate is thin and policymakers are in danger of producing policy that is either badly informed by poor research or uninformed by history. Historical evidence can offer guidance on the effects of changes in the real economy on the voluntary sector. Drawing on British and North American studies, long-run evidence seems to suggest that there is a definite recessionary impact on charities, but although financial donations dip they do recover over time. In the long term the proportion of income given to charity by individuals remains generally constant - and this was so even for the Great Depression of 1929-31 in the USA.

Furthermore, there is evidence that new voluntary organisations continue to be formed even in recessionary periods and that charities have been creative in terms of developing new sources of income during periods of economic duress.

Finally, the authors suggest that those voluntary organisations who do request state aid should not be surprised if, as in previous periods, this is associated with demands for greater accountability, partnership and rationalisation.

The evidence suggests that a recession will have very diverse impacts depending on the position of individual organisations and that it will create challenges other than increasing demand for services and pressure on revenue streams. Therefore, a structured programme of support for the voluntary sector, to ensure that it is well placed to respond to the challenges of the downturn, makes sense. This is so not least given the increasingly important role it plays in the delivery of services - it is also arguable that we have created a situation where it cannot be allowed to fail.

The creation of the National Assembly for Wales heralded the introduction of a Voluntary Sector Scheme with statutory force. This has helped nurture a close working relationship between the voluntary sector and has enabled a sharing of knowledge and views and facilitated closer policy and practice than might otherwise have been possible.

The Welsh Assembly Government's Strategic Action Plan for the Voluntary Sector Scheme "the third dimension" describes the Assembly Government's strategy and programme of action to underpin its support for the third sector. This affirmed the importance attached to its collaboration with and the vital contribution the sector makes to the prosperity and quality of life of Wales.

The third sector is very broad - there are community associations, self-help groups, voluntary organisations, charities, faith-based organisations, social enterprises, community businesses, housing associations, co-operatives and mutual organisations. …