Funding the work that needs to be done in Wales

After a decade of austerity, economic stagnation, and the pandemic, it is perhaps not surprising that our charity partners are telling us that the demand for their services is greater than ever. Small charities continue to provide vital support to people in real need across the country, but public and third sector’s resilience is being pushed to the limit, with one charity leader lamenting that their local commissioner expects them to “make silk purses out of sow’s ears”. Audit Wales’ recent report on the funding challenge facing public services in Wales illustrates how sustainability and resilience of services is under serious threat.  

The issue of voluntary sector sustainability is one of the key topics explored by the Welsh Small Charities Forum. The Forum was created by charity leaders in 2023 and is hosted by the Foundation. Forum members have has created a useful list of Commissioning Good Practice Recommendations, which is already helping to shape Welsh Government’s Funding Code of Practice, and to stimulating much-needed dialogue with stakeholders across the nation. 

Our vision at the Foundation is for a more just and compassionate society. As we pursue that, our key policy priorities are to make sure that accommodation, social security, and wider support is accessible and appropriate for people facing the most complex challenges.  

Whether we are talking about securing suitable and affordable housing, accessing essential mental health support, or simply being able to keep the lights on, times seem to be increasingly hard for a lot more people in 2024.  

The challenge for any leader is how to change things for the better when political rhetoric tells us there is not enough money to go around. As I described in the recent article ‘How money moves in Wales’, deciding what work to fund is a challenge, not just for funders like us, but for public and third sectors. How money moves is also about choices. 

Budget choices in Westminster and the Senedd

While attention in Westminster in recent weeks has inevitably been focussed on the UK Government’s budget, the Welsh Government has been facing challenges of its own in setting next year’s budget. Government budgets shape the wider context of the work delivered by our charity partners in England and Wales; it is worth noting that Westminster and the Senedd have made different choices, for example, on housing (which is devolved to Wales) and social security (which is mostly decided at a UK level).

With few tax raising powers of its own, the Welsh Government is currently heavily reliant on funding distributed under the UK Government’s ‘Barnett formula’. More than half the Welsh Government’s expenditure is on the NHS, and this has been largely protected. Another quarter is on local government, and unlike England, this too is largely protected. The same is true for the vital Discretionary Assistance Fund, which provides financial support to those struggling at the sharp end of the cost of living crisis. Some funding has also been found for new social housing and to prevent homelessness. However, those decisions have led to a squeeze on other spending, which is proving controversial.

As a Foundation supporting dozens of charities across Wales, we recognise that Wales needs significantly more funding than it is currently getting. In the absence of a more generous settlement from the UK Government, that means being creative in identifying additional funding.

We are engaged with several networks pushing for more UK Shared Prosperity Funding, and we consistently engage with relevant government inquiries, including recent Welsh Government consultations on the budget, on ending homelessness, on dormant assets, and the current consultation on social housing supply. We hope that Wales’ new First Minister will move quickly on both these issues.

So, what implications does all this have for our work as a funder working with charities and other partners in Wales?

Implementation and delivery in Wales

We need Welsh Government and the nation’s Public Service Boards to do more to maximise the positive impact from the public money that is already being spent. One of the biggest reforms happening currently, is around Procurement, particularly the Social Partnerships and Procurement Act and associated guidance. The move to the most advantageous tender should complement existing public sector duties such as the Socio-Economic Duty, which came into effect in 2021.  

We are pleased to see progress with Welsh Government’s Funding Code of Practice, and its emphasis on early and continuous dialogue, and consideration of how funders and commissioners value outcomes. 

Alongside this potential change, sits the work of the Future Generations Commissioner. His #CymruCan report outlines plans over the next seven years to achieve the ambitions outlined in the Wellbeing of Future Generations Act. One of the Commissioner’s key missions is to develop a thriving Wellbeing Economy, which reframes prosperity around people and planet, rather than GDP. This is a bold ambition.  

It will be imperative not only to consider the role of public sector, businesses, social enterprises, and communities, but also charities – particularly those rooted in communities. Charities like Amazing Grace Spaces, and The Gap Wales, whose people are amongst those showcased at the current Community Champions exhibition at the Senedd. These charities and community champions have lived and learned experience of some of the most pressing challenges in society today, including the housing crisis, climate emergency and associated migration. Collaboration will be key to equity and impact, and centring lived experience will be essential to building a better future in Wales with the engagement and empowerment of communities at its heart. 

Small Charities speaking up and shaping the conversation 

Through our policy and research, our charity development support, and through hosting the Welsh Small Charities Forum, we are backing small and local charities to advocate for those they serve and strengthen partnerships with others. It won’t be easy, but through dialogue and collaboration, and with a fair political wind, we believe there is hope for improved service delivery and place-based system change across Wales.

What the Welsh Small Charities Forum is doing this Spring 

Thursday 28 March, 12:30 – 3pm, online 

Value of Small training workshop 

Open to any small charity in Wales. Experienced facilitators will support attendees to more effectively articulate the value that their small charity offers.  

Register to attend

Date TBC, online 

Welsh Government Funding Code of Practice session with WCVA 

Using case studies and the forum’s Commissioning Good Practice Recommendations, the Welsh Small Charities Forum will help refine Welsh Government’s Funding Code of Practice guidance. 

5 June, Cardiff

Gofod3 event: Finding the Good: what really is the most advantageous tender?

A panel discussion led by the Welsh Small Charities Forum with cross-sector panellists from across Wales. In the context of significant procurement and funding policy reform, this is a chance to listen to diverse perspectives, develop the dialogue and deepen understanding about all things commissioning, procurement, and social value in Wales.

Sign up

To find out more about the Foundation’s work in Wales, contact Kelly via email khuxleyroberts@lloydsbankfoundation.org.uk