Scottish third sector faces ‘profound crisis’ without urgent government action

Leaders of health and social care organisations in Scotland’s third sector have issued an urgent appeal to the Scottish Government, warning that the sector is on the brink of collapse due to decades of underinvestment, rising demand and severe financial pressures.

The letter has been drafted by the Health and Social Care Alliance Scotland (the ALLIANCE) and the Coalition of Care and Support Providers in Scotland (CCPS) and signed by more than 200 of their members.

While welcoming the government’s recent reform plans based on the Christie principles, the letter stresses that commitments to prevention, wellbeing and early intervention cannot succeed without a sustainable third sector. Many organisations are already scaling back services or facing closure.

Recent surveys highlight the depth of the crisis: nearly half of ALLIANCE members describe their finances as insecure, two-thirds of CCPS providers are relying on reserves to break even – with 91% of them saying they will cease to be viable within four years if things remain unchanged – and over 80% of charities report financial challenges threatening essential services.

The letter warns that the sector has reached a tipping point, and without urgent action, services supporting vulnerable people across Scotland will collapse – placing greater strain on public services, worsening inequalities, and harming communities.

The organisations call for four key measures:

• Action in the upcoming Spending Review through an immediate and substantial cash injection into third sector providers of health and social care to address the current crisis. This must include full cost recovery for increases in employers’ National Insurance contributions.
• A medium-term fully-funded recovery plan for our sector, to address decades of underinvestment and ensure people can get the services they need into the future.
• A commitment to finally deliver multi-year funding, with uplifts that reflect inflation, to ensure stability for organisations, employees and the people they support.
• A firm commitment to fully include the sector in making decisions about how services are planned and delivered.

The letter can be read here.