B&NES Charities report £1.2m of extra costs from April 2025

Local charities in B&NES are being forced to take action due to National Insurance increases, rising costs and an uncertain commissioning landscape, an annual survey has found.

This is the fifth year that Bath & North East Somerset Third Sector Group (3SG) has run its annual state of the sector survey, which saw a shake up of its usual format. As well as the usual surveys, which were sent to all 3SG members, interviews were held with organisations at the end of last year to gather more in terms of qualitative data.

3SG is a charity which provides vital infrastructure support for 250 Third Sector member organisations. This includes 1:1 support, information sharing, events, networking and advocacy with the NHS, local authority and national Government.

The top pressures reported via the survey were funding (76% of respondents), capacity (61%), staffing & recruitment (28%) and volunteering (25%). Over 40% of organisations reported being at capacity for delivering services and 23% are operating over capacity.

Organisations seeking new sources of income continue to grow, with 20.8% now selling goods and services, up from 13% in 2022/23. Grants and funds were still the top source of income at 27%, with public donations and legacies at 15%. Whilst the proportion of income from grants, trusts and foundations remains the largest income for responding organisations, it has declined steadily, from 34% of income in 2022/23 down to 27% in 2024/25. The proportion of income from Government grants has also decreased by nearly 50% since 2022/23.

Over 75% reported feeling concerned about financial viability for the next twelve months, with issues around long term funding, increasing costs and financial pressures, diversification of income and fundraising challenges (public donations from organisations responding had dropped by nearly 4%), staffing and sustainability and the dilemma of creating short term stability at the expense of long term strategic planning and adaptation. Concern has dropped since last year, but worsened since the pandemic overall.

Over 41% of respondents have been using reserves to meet core costs and over the past three years, it is evident that this figure is rising. In 2022/23, this figure was 32% and up from 25% in 2020/21, nearly doubling reserves usage for core costs since the pandemic began. However, there was a 9% increase in organisations reporting over three months’ reserves. 

79% have had to seek new income, which has included increased efforts around community fundraising and appealing for individual giving, despite this dropping as an overall proportion of income.

Most organisations are suffering from rising costs, amounting to between 10-30% increases amongst respondents. 36% said that National Insurance increases will impact them negatively, costing respondents an extra £1.2m. Viability of services and concerns over long term funding are similar to 22/23 levels, as we emerged from the pandemic.

The survey also revealed that three quarters of respondents have taken action as a result of spending pressures, with 40% spending reserves they had not planned, 66% reducing services and/or increased prices for services - 20% had made redundancies or cut staff hours.

Overall, 52% reported that they were either extremely worried or worried about the next twelve months. Concerns over long term funding have increased from 75% to 89%.

Of the organisations completing the survey, approximately 4,477 residents had volunteered for these local charities and 21% said that volunteers were supporting over 80% of their delivery.

In more positive news, over half of the respondents were looking at working collaboratively  and more than 36% had worked with multiple charities. 30% reported using AI platforms with 23% using this technology regularly to help with capacity. There was also a great deal of positivity for 3SG’s annual Volunteer Fair, which is due to take place again at the Apex Hotel on Friday, 17th October. Concerns around staff wellbeing had dropped this year from 70% to 56%, and whilst staff recruitment still remains a top issue, levels of concern had reduced slightly from 59% to 52%.

In the past 18 months, 3SG has moved into greater advocacy work with the local authority and its commissioners. Respondents called for the opportunity to co-design tenders and asked commissioners to engage more and prioritise prevention services.

Becky Brooks, Director at B&NES 3rd Sector Group (3SG) commented: “Our thanks to all the 3SG members and local organisations that took part in the Annual Survey. This feedback gives us a vital, in-depth understanding of the issues facing the Third Sector and it helps us to plan our services for the year ahead in terms of providing the most support. 

“The Sector is having a really hard time right now with rising costs, new rounds of procurement changing the landscape and funding becoming increasingly difficult to secure. 3SG is currently delivering Social Economy West, a sustainability social economy programme that we hope will support organisations who are looking at other avenues for income generation. Most recently, we held a very successful event with Komedia to matchmake local charities and businesses, and we hope to run another of these in future. We believe that there are people out there who want to help, but they are not sure how to or where to go. 

“These types of events should be a small step in bridging that gap and ultimately help to strengthen the sector, but we know that even businesses are finding it hard to donate cash - so we are focussing on how we better use people’s skills and time.

“We will also be looking to do more with the Council over the coming months around commissioning; would like to offer more on AI learning and also to encourage more work around diversity and inclusion. In the past year we have relaunched the Volunteer Network and want to strengthen this offer, working with the new local provider. 

“3SG will continue to do everything it can to help support the local Third Sector here in B&NES.”

Kate Morton, CEO of Bath Mind and Chair of 3SG’s Board of Trustees said: “3SG’s survey is unique in our region and is a powerful barometer of the challenges and ambitions of the B&NES Third Sector in 2024-25.  The results show that unsurprisingly, the same challenges remain - and unfortunately, these pressures are only getting harder to resolve.

“In 2025 we need to be looking at ways in which we can work creatively and collaboratively to bring new initiatives to the table and to forge better relationships with the Local Authority and the Integrated Care Board.  The Third Sector needs to be heard more and supported, and to play an equal and vital role in identifying solutions with our statutory sector partners. We can collectively demonstrate the Sector’s social impact and value, because without the work of the Third Sector, residents will undoubtedly see a loss in services and as a consequence, increased pull on the statutory sector. The system will struggle to meet the increasing needs without us.”

To join 3SG or find out about how it supports charities and Third Sector organisations with training, advice, support and networking events, visit: www.3sg.org.uk or sign up for the 3SG newsletter https://bit.ly/3SGNEWSLETTER