Research shows creeping third sector crisis

Cornerstone chief executive has warned that the economic environment in the North-east is placing pressure on the third sector which threatens the future delivery of vital services such as care for older people and people with disabilities.

Edel Harris, chief executive of Cornerstone and member of Aberdeen & Grampian Chamber of Commerce (AGCC) board, says that the sector appears to be at a critical juncture where a collective effort is required from within the sector, as well as from local and national government.

Speaking after the publication of new AGCC research which shows that over half (52%) of those surveyed say their organisations are becoming more reliant on casual and agency staff, she said urgent action was required.

“The North-east economy is thriving and of course we welcome that, but it is throwing up challenges which are placing the most vulnerable in our society at risk.

“The third sector’s inability to attract and retain permanent staff is leading to an over-reliance on using casual staff, with the consequent lack of continuity, challenges with quality assurance and increased risk. 

“We estimate that the care sector alone is spending around £7million a year on employing casual or agency staff in Aberdeen and Aberdeenshire.

 “Respondents to the survey are reporting that agency staff are no longer a ‘flexible resource’, and that they have now become a core safety net to allow services to be delivered.”

The research, undertaken by AGCC and supported by Cornerstone, provides figures which show the local third sector’s inability to match rising salary levels. Many working in the sector earn only a third of the average wage for the North-east, the average salary of £12,384 comparing with £34,897 for the workforce in Aberdeen City and Shire as a whole.

The organisations responding to the survey employ over 3,000 staff in the North-east region, who in turn support over 350,000 clients and customers across Scotland.

Remuneration plays a large part in the challenges in staff recruitment and retention, with over half of the organisations describing senior management, IT, fundraising and administrative positions as “hard to fill”.

Eighty-three percent of those in Aberdeen cited competition from other sectors as the main reason and 73% said the inability to offer higher salaries made recruitment difficult.

The sector is working hard to meet the challenges being faced with two-thirds offering home working as an option with one in four offering an increased holiday allowance.

James Bream, research and policy director at Aberdeen & Grampian Chamber of Commerce, said: “The third sector recognises that it finds it hard to compete on purely financial considerations so it has looked to more innovative methods to engage with staff.

“Funding tightness means many organisations are facing a point where they will find it difficult - or impossible - to deliver services within the funding they are being given.

“Recommendations include delivering on further collaboration within the sector and with partners outside the sector.

“However, fundamentally the sector is probably being most acutely impacted by factors driving up the cost of living in the region such as housing costs.

“There is a risk that without addressing some of the challenges in our region, the care sector in particular will have to make some challenging, and potentially untenable, choices.”

Click HERE to read the full research report.

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