Are we witnessing the death of government grants?

With government grant-making showing a sharp downward trend in the last decade, what do the figures suggest about the future?

The figures are bleak. Very bleak. From a height of just under £6 billion in 2003, government grant-funding to charities has plummeted by over 60% to just £2.2 billion in 2013. Although the total amount of government funding to the voluntary sector increased over the same period (rising before the recession and dropping again after) the gulf between grants and contracts substantially widened.

In the year 2000 every £1 the government gave to charities in a grant was effectively matched by another £1 it gave to charities in a contract. By 2013 the government was giving just 19p of grant money for every £1 of contract money.

Actual grant funding (£billions) from government 2000-2013 (NCVO, Civil Society Almanac 2015) and projected grant funding 2013 – 2020

Where are we heading?

If the trends we are seeing continue, it is possible that the total amount of grant funding from government will continue to drop to as low as just £100m by 2020, as the above graph shows. This is a projection based on trends over the last decade and paint a very worrying picture. If grant funding drops to this level it would mean many charities will have disappeared by 2020, especially in the small-medium sized bracket which largely depends on grants and are not well-suited to take on complex contracts.