A focus on funding: The role of voluntary sector Local Infrastructure Organisations during the COVID-19 pandemic in England

This blog continues an occasional series focusing on the role of Local Infrastructure Organisations (LIOs).

You can find previous entries HERE

Written by Dr Daniel Haslam with thanks to Dr Carol Jacklin-Jarvis for comments.

Introduction

Funding is an essential aspect of any voluntary sector organisation. LIOs have historically generated income through the delivery of services, donations, volunteering, room hire, grants, and a variety of other means. During the COVID-19 pandemic these sources of income were affected in different ways.

For some organisations this had an impact on their ability to stay open, others saw an increase in profile which has generated additional funding.

The picture amongst the LIOs that CVSL spoke to during 2020-2021 was very mixed. 

COVID in context

It was clear from our conversations that funding, particularly from the public sector, had been an issue for many years. Most linked this to ongoing austerity in England. One organisation had halved in size over the last decade for example, and others had found their agreements with local public sector organisations under almost constant review. 

Some interviewees spoke about how the lack of clear agreements around what existing funding was for and related lack of understanding within funders about what LIOs do meant that the COVID crisis was used to assert additional control or even remove existing funding.

“One effect of COVID is that the…the statutory sector almost has a stranglehold on the local voluntary sector… I now have four other bosses that I never knew I had, who will literally phone me up and tell me that two of my staff are needed on an event tomorrow and can I just yank them off what they’re doing and send them over there. Whereas we try to be as accommodating as possible, if we’re not accommodating… It’s not a healthy relationship at all I don’t think at the moment. I’m not sure how it’s going to become healthy again.” Interview 68

LIOs had also, like many voluntary sector organisations, been doing ‘more with less’ pre-COVID. As a result, there was very little slack in their organisations when COVID hit, giving them little choice than to respond firmly to public sector organisations who were asking for help.

“I wasn’t holding a gun to their head. I just said, look, you’re asking for more than what we were doing previously. This is outside the scope of our current contract... You’re going to have to pay.” Interview 48.

This is in many ways a narrative of a lack of change, even during the COVID crisis. LIOs experienced a continuation of ways of working that had been established pre-COVID and that they saw as detrimental both in terms of the amount of funding income and the ways they were able to use that funding.

Opportunities

The value of LIOs was recognised at the local level by both the public sector and other funders. One interviewee reported receiving over £100,000 in donations from a private business. Others received funding from local councils for the first time ever or developed new relationships with the NHS. 

“Like, I say we’ve got the four [new] workers now, all coming with a really good fee per person. And now they’re paying us for… the backfill of getting the work done, as an admin fee. And that’s nearly three grand a piece. So, it’s extremely lucrative at the minute.” Interviewee 42

Some interviewees also referenced the reduction in ‘red tape’ which enabled targeted funding to be directed as and when it was needed. Additionally, existing funding was able to be negotiated and redirected, based on changing local needs.

The value of good connections

• Good previous connections meant an ability to generate additional funding during COVID
• However, this led to increasing demands and control 
• This in turn led to great change and disruption to existing services
• Previous connections and funding relationships were also used at times to justify high levels of referrals for COVID related work

Organisations who were not well connected pre-COVID found themselves brought into new funding relationships because of increasing demand for their services. 

Others had been well connected but did not receive direct funding from public services (often as a result of previous cuts) and so were insulated somewhat from any funding changes.

Some who had relied on good connections to generate diverse funding pre-COVID found these income streams disappearing and not having a fallback option. 

In summary, good connections with funders were not necessarily an automatic ‘win’ for LIOs, their individual circumstances and relationships dictated how this played out in practice. 

Related issues

In addition to the complex funding landscape during COVID there were many related issues that both influenced and were influenced by the funding that LIOs received:

• Increased funding led to increased pressure around staffing, switching services, uncertainty about legal and policy guidance, etc.
• In one example an LIO gave money back to a funder because COVID meant they could no longer deliver what had been promised. This caused significant tension within the LIO.
• Some LIOs had healthy financial reserves which helped them to offset any funding losses.
•  LIOs surveyed their members during COVID and found the majority expected to lose funding. LIOs may therefore represent a unique subset of voluntary sector organisations in how their funding changed.
• Approaches driven by austerity were alive and well, particularly in ongoing discussions around ‘rationalisation’ or ‘consolidation’ of the voluntary sector. There was a fear that this was foreshadowing future funding cuts, particularly from a public sector emboldened by contact with LIOs, but still not quite understanding how these organisations work or the wider complexity of the sector. 

“The statutory sector has got so used to making outrageous demands with ridiculous short notices and to hell with the cost. I'm not sure they're going to easily surrender that power.” Interview 68

Conclusion

In conclusion, the funding picture for LIOs during COVID was very mixed. 

Most organisations lost funding in some ways, but many also saw increases from other sources or for other work. The balance of the gains and losses was different for all of our sample but overall, it does not seem to have been the case that LIOs suffered catastrophic losses and in some cases may have benefitted because of an increase in profile and emphasis on their service offer locally. 

Arguably this is something of a reset after the large cuts LIOs had experienced pre-COVID and the devaluation of voluntary sector infrastructure generally. 

It remains to be seen if this new focus continues. We’ll report soon on our 2022 research so stay tuned!

14th July 2022