The charity sector is set to lose over 60,000 employees as redundancies continue to prove essential to cost-cutting exercises for charities amid the Covid-19 pandemic.

New research has revealed a £10bn funding gap created by the health crisis has put an ‘alarming proportion’ of jobs and services in the firing line.

The Charity Sector Tracker, published by Pro Bono Economics, the Institute of Fundraising and Charity Finance Group, found 58% of charities are getting set to cut back on services to help retain some funds for those considered to be most essential.

The survey of 455 charities found 19% have already made redundancies and 23% plan to make further cutbacks once the government’s furlough scheme comes to an end in October.

However, the figure jumps among the UK’s largest charities, with 44% set to make further cutbacks and 8% anticipating the reduction of their headcount by 25-50%.

'A painful contraction of charity provision'

Around 5,400 job losses have already been announced in the sector since the start of the pandemic, but the results from the survey indicate this is just the ‘tip of the iceberg’, with estimations suggesting the true figure is closer to 25,600, with another 34,100 employees set to lose jobs by the end of the year.

Pro Bono Economics said job losses on such a scale will result in a ‘painful contraction of charity provision at the very moment thousands more are expected to turn to them for help’.

Unemployment in the UK is anticipated to double in the run-up to Christmas, just as the risk of a second wave of coronavirus infections is at its highest. But while 68% of charities expect demand for their support to rise in the next six months, 58% say it is likely they will have to reduce the services they offer over the same period.

The firm said this pressure is expected to last well into 2022, with 70% of the charities surveyed expecting it to take more than 12 months for their income to return to pre-crisis levels and 26% thinking the climb back will take more than two years.

“Charities have been under extraordinary pressure since the start of the pandemic, dealing with the perfect storm of increased demand and constrained resources. To date they have responded with typical resilience and invention, but the coming months look set to prove tougher still,” Pro Bono Economics CEO, Matt Whittaker said.

“With the recession biting and unemployment rising, the social sector has never been more needed. But an alarming proportion of jobs in the sector are now at risk. That means many of the charity workers who have provided vital support to millions across the country since the start of the Covid crisis are facing a very uncertain future.”

“Navigating this period rests in part on getting more resources into the sector, from government, from existing funders and from members of the public. But it also rests on reversing the public policy neglect the sector has suffered from over many years. That’s particularly true if civil society is to play the pivotal role that it should do in the country’s recovery from the pandemic, helping to fulfil the Prime Minister’s pledge to ‘build back better'.”

An ‘alarm bell’ for the government

Charity Finance Group chief executive, Caron Bradshaw added that the losses mean society is “closer to losing huge capacity at the heart of our communities”, and the government needs to step up to help.

“The scale of job losses in the charity sector means less capacity to help people survive loss, hunger, unemployment. Charities are vital to help society through the crisis of Covid and will be essential to the effort to rebuild as we go through a deep-rooted recession and a potential second wave,” she said.

“These results should ring an alarm bell for government that without action there is worse to come.”

Blood Cancer UK: ‘Our income has dropped by £6m’

Blood Cancer UK is among the charities to have lost millions of pounds during the pandemic, recording a drop in income of £6m, despite cost-cutting exercises.

The charity said the loss of income has happened despite ‘extensively’ cutting operational costs and furloughing 40% of its staff, resulting in the need redundancies.

“We have had no choice but to propose a reduction in the number of people we employ by 25%. This is essential to continue investing in research and supporting our community,” the charity’s CEO, Gemma Peters said.

“It’s clear that we’ll lose a significant number of brilliant, dedicated, people. Even with these measures, we’ll have £1.8 million less to spend on research this year which means we’ll be able to do less for people with blood cancer in the short term. It is a gut-wrenching situation but it's what we have to do to be strong for the long haul, to beat blood cancer.”

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