Charity-provided community services more threatened in Wales than rest of UK

Services provided by charities to some of Wales’s most vulnerable people are at greater risk than elsewhere in the UK because of the impact of the swingeing cuts the public sector is required to make following the recent budget.

Specialist accountants Broomfield & Alexander, which has offices in Cardiff, Newport and Swansea, is warning that because of the size of the charitable sector, the effect of public sector cuts will be felt most keenly in Wales by the many not-for-profit organisations contracted to deliver community projects.

Director Sarah Case, one of only a handful of professional advisors in Wales to hold a Diploma in Charity Accounting, says charities need to act fast to shield themselves from potentially savage cuts.

“The large public sector in Wales is set to suffer, but the role of the third sector has been important in making sure services reach many communities,” she said.

“Charities employ around 2.6 per cent of the Welsh workforce, and the infrastructure they provide is under severe threat because of the combination of VAT increases, the required cuts of 25 per cent in public sector spend and a reduction in devolved government spending.”

She said charitable organisations were feeling the need to focus on mainstay activities, reassess the 'essentials' and look at ways to achieve more with less.

“We would urge charities to anticipate risks early and work with their accountant and auditor to control them to ensure continued sustainability and support for community projects.

“It is still possible to find ways to manage the risks so that the opportunities can be embraced. Traditionally, auditors of not-for-profit organisations focus on compliance with procedures, but now, in making decisions on in-year budgetary savings and efficiencies, they need to look ahead to think more about calculated contingencies - redundancies and their impact , or even the impact of leases for office equipment like photocopiers that may be directly linked to funded projects.”