This briefing document provides a short overview of some of the key points raised by both speakers and guests in the September and November London Specialist Advice Forum.

1. The cost of living crisis in the sector (Pro Bono Economics)

The impact of the cost-of-living crisis and the cost pressures faced by charities in the UK can be measured in three main ways:

• Demand: Since October 2020-2022 demand for services has increased by 30%. Figures show that household debt disposable income is at the highest it’s been since 2009. There is an expectation that there will be uptake in demand for debt services as wages fall and the unemployment rate rises. Expectation that living standards will also fall by around 7% by the start of 2024.2.
• Costs: Office for National Statistics CPI indicates large spikes in inflation to be high until 2023 and around 2% for 2026.As inflation rises, reserves will devalue. The average reserves from pre-pandemic data suggests that for charities with an income of half a million (£500,000) if their costs rise with inflation, they will need to increase their reserves additional £30,000 to ensure that they are not worse off. We are already seeing gaps in pay in the sector with notable differences between charity sector pay and the other industries.
• Income: Charity income is projected to rise by £1bn between 21/22 and 22/23, but if costs and rise in inflation, we expect the real value of charitable income will decline by £2.2bn over that period this is with the upwards pressure with demand for services.

2.  The impact of cost of living crisis in the sector and funding

The rising cost of living has an impact on demand of service in terms of income charities receive and the services they will be able to run. This can have an effect on data requirements, measurement outcome frameworks and the standard way we think about data and monitoring.

• There’s a trade off when it comes to data requirements relating to the size of grant, keeping the level of data required proportional to the size of the grant.
• Different funders have different views but generally more and more are moving toward a “trust- based framework." The outcome framework spectrum (on slides) ranges from trust-based to measurement focused.

1. Trust based: No imposition on grantees, maximum flexibility, low resource requirements for charity and funder.
2. Measurement Focused: imposing measurement framework in terms of what data is needed, focus on those charities that align with logic mode, invest in evidence base and impact resources.

• There is a potential for more organisations to use the ONS measure of wellbeing as a consistent outcome measure. You can find out more about this measure here.  
  

3. Discussion around Cost of living Crisis- How is it impacting staff and clients

The ‘cost of living crisis’ is a moniker that hides a multitude of crises, and not simply the sharp increase in the cost of almost everything.

• Client Need: Clients are poor to begin with and to add on the effects of the pandemic and rise in energy bills, inflation, there is added pressure without systematic change. It can feel demeaning to call it the cost of living crisis. The scope of poverty is far greater than what advice agencies have been used to and affects a lot of people who are not normally part of their client demographic. Many are shocked at the number of older people (aged 70-80) seeking help. Crisis is spreading to people who are not on benefits. Feeling that government support is not directed at their clients 
• Funding and Policy: Some other funders have given additional funding to assist organisations through the cost of living crisis, but advice charities in the Forum felt that we need action from the government. We can also work on better coordination from London boroughs, and spread news of best practice. 
• Staff needs: Services are already overstretched pre-pandemic. Although it’s great to see funders increase funding, it is plugging a hole from a lack of a properly funded Legal Aid system. Advice charities are concerned about how they can retain staff with no pay rises to keep in line with inflation rates.

4. Practical solutions for dealing with the cost of living crisis: Working Families, Good Wellbeing practice

• Staff hangouts on Teams twice a week, with staff encouraged to dial in to at least one. These get staff from different teams together and talk about non-work stuff. 
• Advice team coffee-and-catch-up sessions on Teams – regular (daily or a few times a week), informal catch-ups in the morning with the advice staff working that day
• Monthly in-person meeting for all staff in London, usually split into two parts: any issues raised by staff, update from CEO on finances/governance/strategy/KPIs, meet a trustee, etc.
• Group counselling for the advice team, to help with handling distressing queries. 
• Two employee reps at all times, with structures in place for them to feed into the board (people and governance sub-committee).

You can check out our general wellbeing practices and resource here