SCOTTISH charities have suffered an unprecedented blow to their finances due to Government cutbacks and austerity measures introduced by councils, according to a report.
Government support had been cut in real terms by 20 per cent from £1.87 billion in 2010, to £1.68 billion last year, leaving them with £185 million less in funding, said the umbrella group for charities.
The Scottish Council For Voluntary Organisations (SCVO), which produced the report, said that in real terms the cut was £376m to the sector.
It also said charities had seen a 10 per cent drop to 34 per cent since 2010 in the amount of State backing they receive.
The report warned charities were becoming less reliant on public funding, but in some cases were having to scramble for new sources of support.
While the sector's income grew overall by nearly six per cent between 2012 and 2013, this was driven by a small number of large charities. Most third sector organisations saw income plateau in 2013, averaging growth of only 0.8 per cent, well behind inflation.
The report says more support from the public is helping offset the impact of public sector cuts, with donors responding to an increased awareness of need. Donations from individuals have increased by 40 per cent in the last three years, up by more than £100m.
But cuts have been exacerbated by increased demand due to austerity policies for many charities.
An SCVO spokeswoman said self-generated income was helping shield many organisations from cuts, but not all charities were coping so well and many were adopting increasingly complex funding models and chasing multiple income streams to stay afloat.
Ruchir Shah, the group's policy manager, said: "With even more cuts to come, charities are having to think imaginatively to find new, more sustainable, sources of income. Charities have proved they make a positive difference and that they can find new ways to respond to ever rising demand. But this can't continue indefinitely."
Tanya Rhodes, spokeswoman for Scottish Women's Aid, said cuts were putting intolerable strain on the specialist services offered by aid groups.
She said: "In our most recent funding survey, 81 per cent of our member groups reported a cut or a standstill in their funding from local authorities and 89 per cent received no inflationary uplift to cover increased energy, transport and other operational costs."
"One in five groups have cut or frozen staffing levels, others have reduced therapeutic activities for women and children, and are operating increased waiting lists for refuge, recovery and outreach services," she said. "We recognise the Scottish Government's commitment to maintaining funding for domestic abuse service provision, and look forward to working with it and local authorities to ensure needs can be met."
Ewan Aitken, chief executive of Edinburgh Cyrenians, which works to prevent homelessness, said: "Austerity politics and a narrative that stigmatises State support for those who are struggling has meant the public sector is under pressure like never before.
"Charities like Cyrenians will have to use extraordinary creativity to generate new sources of income."
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