Cash flow, hiring and political uncertainty impact on 3rd sector

Richard Ramsey and Nora Smith pictured at the Index launch
Richard Ramsey and Nora Smith pictured at the Index launch

Cash flow pressures, recruitment difficulties and uncertainty linked to Northern Ireland’s political situation are significantly impacting on the third sector’s ability to deliver key services, a new report reveals.

The Ulster Bank and CO3 3rd Sector Index is a key barometer of Northern Ireland’s third sector, involving a quarterly survey of CO3 members who include the leaders of some of Northern Ireland’s largest charities and social enterprises, providing services from care to counselling and support, and training and development.

Over four fifths (86%) of third sector leaders in the latest survey reported that the lack of an Executive and Assembly has had a negative impact on their organisation, including due to funding uncertainty - a 9% increase from the previous quarter.

The latest index also points to an intensification in cash flow pressures in the sector during the first quarter of the year, with more than a third of leaders saying that their organisation’s cashflow position is now unstable - up from 17% in Q4 2017.

A third again say their organisation is experiencing difficulty recruiting the right skills, including in areas such as social care, fundraising, finance and administration. Anecdotal evidence suggests that funding uncertainty due to an absence of decision-making at Stormont means potential candidates are generally opting for more secure employment opportunities elsewhere.

Despite the challenges the sector is facing though, 40% of leaders believe their organisation’s turnover will increase in the next 12 months, as demand for the services the sector provides increases.

“The uncertain political environment continues to impact negatively,” said CO3 chief executive Nora Smith.

“We can see from this quarter’s results the influence the lack of a local government is having. Late and short-term budgetary decisions have impacted on cashflow, and this, in turn, affects the sector’s ability to plan and deliver key services.

“It is a challenging time, yet the resilience of the sector shines through with a high proportion of respondents stating their turnover will increase over the course of the next 12 months.”

Richard Ramsey, chief NI economist at Ulster Bank said: “With the province and GB lagging other EU countries in terms of economic performance, this, combined with an unfavourable exchange rate, is an increasing incentive for migrant labour in Northern Ireland to move to other parts of Europe to work.”