The world’s oldest and largest youth charity has today warned the incoming Prime Minister of the potential threat of a third sector meltdown, as the impact of the cost of living crisis hits hard on already overstretched charity budgets.
Like everyone else in the country, charities are feeling more than just the pinch when confronted with the significantly increasing costs of keeping their vital services running. YMCA, which supports more than 570,000 young people each year across 700 communities in England and Wales, with everything from housing and mental health support to youth work and food banks, is calling for urgent action from new leadership as the sector teeters on the brink of collapse.
In every area imaginable, charities are feeling the impact of this crisis, from rent and ever-rising food costs, to high inflation, wages and crippling issues with recruitment, culminating in a perfect storm. That storm is beginning to hit, and threatens to become much worse.
Most significantly, rising energy prices risk compromising the future of some YMCAs, as many of those coming out of fixed price set-ups face eye-watering increases of up to 600%, with one local YMCA citing a potential rise from £680k in 2021-22 to £2.5M. Many fellow sector partners are reporting the same very real issue.
Government help to date sees many charities falling outside the scope of assistance – the government’s proposed energy price caps do not apply to charities, and its £400 domestic rebate is only available to individuals. YMCA welcomes the news that the new Prime Minister intends to set out plans to further help with rising energy costs within the first week of taking office. However, YMCA strongly urges that the Prime Minister also consider the plight of charities and the impact that a collapse in the third sector will have on the many communities they support across the nations, in the package she intends to announce.
Denise Hatton, Chief Executive of YMCA England & Wales, said:
“It is not an exaggeration to say, after having talked with many of my colleagues in the sector, that the current economic situation – particularly the impact on inflation on costs and the surging energy prices – has the potential to push many organisations already vulnerable following the impact of the COVID pandemic past breaking point.
“YMCA does acknowledge that some assistance has been put in place, but it is nowhere near adequate, and it does feel from the announcements made so far that the role of the charity sector and its importance in providing key support to communities across the country is being overlooked and undervalued.
“The new Prime Minister’s package must ensure that any new emergency package gives the same support to charities as it does to business and households. It is imperative that any support is sufficient and immediate to ensure that the charity sector, and the millions of people reliant upon it every day, are not left further behind.”
YMCA England & Wales is made up of 83 member YMCAs working to ensure young people have opportunities to thrive and contribute positively to their communities every day.