Scots third sector ‘bails out’ services

Scots third sector ‘bails out’ services 

Regeneration & Renewal

More than two-thirds of Scottish public service delivery contracts are subsidised by the voluntary sector, according to a report published last week.

The report, published by the Scottish Executive, found that 71 per cent of public service delivery contracts fail to cover the full cost of delivering those services. It found that voluntary organisations are subsidising the contracts using their reserves and income sources such as grants.

According to the report, almost half the organisations said they were making some sort of efficiency savings to cover the subsidies.

Implementing full cost recovery could cost the public sector in Scotland £106 million to £130 million a year, it says.

A spokesman for the Scottish Council for Voluntary Organisations (SCVO) said the third sector was ‘bailing out’ the public sector. He added: ‘The Scottish Executive has a responsibility to make sure that deals are struck fairly. That’s not happening.’

The report recommends that voluntary sector service providers withdraw from contract negotiations and service delivery when public bodies are unwilling to pay reasonable and realistic service delivery costs.

The SCVO spokesman added that some Scots charities were already withdrawing from public service contracts.

– Full Cost Recovery in the Voluntary Sector is available via