Hard Times for Britain's Charities Struggling to Do More with Less
The UK voluntary sector is facing significant challenges in 2025 due to austerity measures, the ongoing impact of the pandemic, and the cost-of-living crisis. Demand for charitable services is increasing, yet state funding remains inadequate. Charitable giving has declined to its lowest level on record, and volunteering rates have fallen. Meanwhile, operational costs have risen, including due to the rise in employers’ National Insurance contributions introduced in April 2024.
Major charities have been severely impacted this year. For instance, Samaritans closed half of its 200 branches, Macmillan Cancer Support cut a quarter of its staff and scaled back hardship grants, while other jobs remain at risk at organizations like Oxfam and Relate. The National Trust has also faced challenges from anti-woke campaigns that threaten its viability.
Thousands of smaller grassroots charities are struggling as well. A survey by Voluntary Norfolk found that about half of the county’s charities fear they will have to let staff go. Burnout is rising in these already overstretched workplaces.
In response, Labour, under Keir Starmer, launched the civil society covenant in July 2025 to place the voluntary sector at the heart of civic renewal. However, this initiative requires more than warm words; concrete funding and human resources are necessary to be effective.
Historically, the sector has swung between phases of professionalisation, such as in the 1960s and 1970s, and periods of state retrenchment, like during the Thatcher era and Cameron’s Big Society. Gordon Brown's funding boost during the 2000s and the rise of social enterprises then marked a high point before the 2008 crash led to two lost decades.
Underfunding persists, with most charities' grants and contracts failing to cover costs since 2020. Donations, especially from younger people citing affordability issues, have dropped significantly, as highlighted by NCVO data.
The editorial emphasizes that charities are an indispensable social and economic asset that can prevent crises and save public money, deserving transformative funding. With roughly 160,000 charities operating across the UK and holding a trusted position, they have a unique role to partner with the state.
Looking ahead, 2026 should be a year of action—moving beyond rhetoric towards a formal alliance that empowers the voluntary sector.
