Navigating a section 114 notice

October 2024
Research
Good Practice Guides
Influencing

Navigating a section 114 report front cover

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Navigating a section 114 notice

October 2024
Research
Good Practice Guides
Influencing

There’s been a marked increase in section 114 notices since 2018, with 13 issued in the last six years compared to only two in the 25 years prior.

The section 114 process, and stages preceding it, can produce cliff edges of funding for charities providing public services, which are detrimental to communities and to charities themselves.

Although councils and charities will face unique circumstances, this policy report and VCSE guidance commissioned by NAVCA and Lloyds Bank Foundation highlights key recommendations for any council or VCSE organisation going through financial instability or a section 114 process.

VCSE stakeholders should build approaches to navigating an s114 around three core components:

Evidencing the VCSE role and contribution
Building council relationships at multiple levels
Reframing the external narrative around the impact of cuts on communities.

Local government is urged to build meaningful and effective relationships with local VCSE organisations, involving them early on in navigating challenges and engaging at a strategic level in shaping new operating models.

"Underfunding is a huge issue for everyone. In Leicestershire, the local council has declared they'll require a section 114, but the county council is trying to avoid it, and this is generating a lot of uncertainty and anxiety and probably further damage. All but 'essential' services have been cut, including many trusted and relied upon by a community still struggling after the pandemic and wrestling with rising living costs. Discussing this financial insecurity collaboratively and giving clarity on what a section 114 would mean for voluntary sector services and the people they help would benefit everyone. We hope this study and the guidance will encourage authorities to involve organisations like us, who deliver important local services, in conversations."

- Kieran Breen, Chief Executive Officer at Leicestershire Cares

Guidance for the VCSE sector

There will be diversity of experience
Evidence your role and local contribution using data, and why this would be missed if funding was cut due to an s114 notice
Build your council relationships at multiple levels, as well as with other sector partners from key organisations
Reframe your external narrative to highlight the impact of cuts on beneficiaries and the wider community, rather than the impact on the VCSE organisation itself
Context is everything - where s114 notices have been navigated more successfully, the VCSE sector was able to use not only its own bespoke evidence base but its understanding of local political relationships and dynamics, often needing to work at a significant pace.
Collective strength and voice are likely to be required. Identify how information and data can be shared across local VCSE networks
Work in partnership with other VCSE organisations and the local infrastructure organisation where present, to develop a collaborative approach to work with the council to support the local community.

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Policy recommendations

For local government:

Involve the VCSE sector earlier in budgeting and financial challenges, especially during the more formal s114 stages, and in shaping new operating models.
Recognise VCSE value holistically, not only through a contractual lens.

For central government:

Urgently issue updated and new guidance for councils in financial difficulties or working through a s114 notice.
Provide far greater oversight of councils in pre s114 stages, as it is possible to anticipate which areas could become vulnerable. Additional advice, support and where necessary, part funding can help in averting this situation.
Build the evidence base of the impact of s114 on local areas, to share good practice and provide more support for councils.
Review the definition of statutory services to have a more consistent application of definitions, with a strong focus on social need and on ensuring that the voices of those impacted by cuts or changes are heard and acted upon.

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The flipside of demonstrating the impact you make is being able to confidently demonstrate the impact of cuts, in particular on the most vulnerable who may well then need additional statutory support. Make the case for keeping people out of statutory service need.

- VCSE Organisation

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Download the guidance

Watch the webinar

We hosted a webinar with a panel of VCSE leaders who reflected on their experience and shared their insights with other organisations as they navigate the stages of financial difficulty and work to mitigate the impact on communities. Watch the recording.

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Navigating a section 114 notice

Navigating a section 114 notice

Guidance for the VCSE sector

Policy recommendations

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