Urgent support needed to help community groups navigate Cost-of-Living Crisis

Following the publication of Beyond Essentials: Community Responses to the Cost-of-Living Crisis, Eleri Williams, Policy and Research Advisor at Building Communities Trust (BCT), shares the challenges this research exposes as well as BCT’s vision for a more supportive environment for community organisations across Wales.

Mitigating the impact of socio-economic challenges facing people across Wales is nothing new for many community groups. In fact, for some it can be the very reason they exist. However, supporting people through the ‘permacrisis’ of recent years is now taking a toll on community organisations and the thousands of people they support. 84% of respondents to our survey told us that the Cost-of-Living Crisis had affected their work ‘markedly’, with 54% setting up new services or activities in response to the crisis. Without adequate long-term support we fear that community groups will have no option but to curtail their activities and possibly stop entirely, resulting in further scars in our communities and detrimental impacts on people’s wellbeing.

This research exposes a clear and consistent pattern of groups’ incomes decreasing at the same time as both their costs and demand on their services climb sharply. 

Donations (both financial and material) are reduced, fewer people are able to pay activity fees or purchase refreshments, venue hire is lower, when at the same time requests for support have increased exponentially, energy bills have risen, fuel costs have multiplied and salaries of staff (if there are any) are higher. We heard that: ‘We don’t get as many participants where things have to be paid for. So unless it’s free then people don’t come.’ 

Typically, Service Level Agreements and existing contracts are fixed agreements, not rising with inflation, leaving community groups extremely vulnerable and fragile to the economic turbulence of recent years. Many groups shared the worries they had about their staff and volunteers, particularly highlighting the stress accumulated from additional workload pressures.

63% of respondents told us that financial worries were a key concern impacting their staff and volunteers’ mental health and wellbeing. We heard: ‘I have struggled to meet basic needs of myself and my family on the money that I earn in my current position, and it has forced members of staff to look for other jobs that will meet their financial needs.’

The impact of a reduced public purse

As the public sector purse tightens, ad-hoc grants from local authorities and health boards, which previously offered short-term but welcomed ‘top-ups’ to community groups’ balance sheets, have not been forthcoming.

[W]e call on the Welsh Government to use the levers it has, to ensure adequate funding and a supportive environment for community groups and their activities. 

‘There’s no money in the system – lots of places where groups would normally get money from, like the local authority and health board, have no money and so there is going to be a massive impact which hasn’t been felt yet.’ This is a trend that looks set to continue, ahead of Rachel Reeves’ budget in October. As such, we call on the Welsh Government to use the levers it has, to ensure adequate funding and a supportive environment for community groups and their activities. 

Gradually, and at times imperceptibly, community organisations have become a more and more important way of delivering services and providing support to vulnerable people in their localities since the start of austerity, then massively accelerated by firstly Covid-19 and now the Cost-of-Living Crisis.

51% of survey respondents consider their organisation to be providing support which was previously the responsibility of the state. 54% told us this had increased since the start of the Cost-of-Living Crisis. Government rhetoric and guidance has slowly, partially, recognised this shift, but resources haven’t followed. On the contrary, as community groups contribute increasingly more to public policy, resources in support of their work have declined and we fear vital groups will start folding if this continues. 

In the 2024-2025 Welsh Government budget, the Social Justice portfolio experienced the deepest cuts of any spending area. In the forthcoming budget for 2025-2026 we would like to see firm commitments to the financing of community action, as well as the wider third sector, which together provide increasing levels of support to individuals. 

The scale and range of community responses

Our research discovered a wide range of responses by community groups. Many were focused on provision of food and warmth, however, the range of responses went far beyond these fundamental needs. Our survey uncovered 84 initiatives linked to food provision, 43 warm spaces, 37 initiatives linked to warmth and energy efficiency, including distribution of lightbulbs, hand warmers, hot water bottles and draught excluders.

We heard about the development of community shops, community growing spaces, transport initiatives and reuse and recycling projects. Despite the varied nature of responses, a consistent theme amongst them is tackling the immediate challenges facing people in communities, whilst also contributing significantly to broader Welsh Government ambitions.

[W]e urge the Welsh Government to recognise the central role played by community groups and organisations in insulating people from the worst impacts of the Cost-of-Living Crisis, and to develop a long-term funding stream for community groups.

Investing in what works

Now is categorically not the time for community groups and organisations to have to develop new or innovative project-based activities to build their finances. Instead, we urge the Welsh Government to recognise the central role played by community groups and organisations in insulating people from the worst impacts of the Cost-of-Living Crisis, and to develop a long-term funding stream for community groups.

What next?

The pandemic and the community response it resulted in significantly changed the attitudes of policy makers in Wales towards community action. There appeared to be a greater recognition that community organisations could reach people in ways that public sector providers struggle. Beyond Essentials unquestionably shows that community groups and organisations have once again stepped up, providing activities that contribute to wellbeing and help to mitigate severe challenges to basic living standards. In doing so, it also exposes the fragile and insecure position of many community groups. To reduce this fragility, we must invest in community action now to protect and prevent the loss of community groups at a time when they appear to be most needed.

All articles published on the welsh agenda are subject to IWA’s disclaimer. If you want to support our work tackling Wales’ key challenges, consider becoming a member.