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Home Organisational Culture
Election Day’s Ripple Effect: What Lies Ahead for the UK’s Third Sector

Election Day’s Ripple Effect: What Lies Ahead for the UK’s Third Sector

Sasha Brown by Sasha Brown
July 5, 2025
in Organisational Culture
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As the United Kingdom approaches a pivotal general election, the implications for the Third Sector could not be more profound. Often regarded as the social backbone of the nation, charities and non-profits are contending with a complex web of challenges from dwindling financial support to the surging demand for essential services. In a climate shaped by economic uncertainty and social transformation, the call for bold, strategic leadership has never been louder.

The Financial Undercurrent: Sustainability in Question

The economic turbulence of recent years—from the reverberations of COVID-19 to geopolitical unrest and an energy cost crisis has left the Third Sector navigating treacherous waters. With inflation soaring and interest rates rising, individual giving has taken a hit, leaving many organisations financially exposed.

Smaller charities have borne the brunt. As local authority budgets tighten and government funding contracts, some have been forced to scale back services or close their doors entirely. The consequences are stark: communities that depend on these services are being left adrift at their most vulnerable moments.

This is a moment that demands not patchwork solutions but a structural rethink. The incoming government must not only address short-term funding deficits but reimagine how the sector is supported and sustained.

Demand Versus Capacity: A Sector Under Strain

Charities across the UK have experienced an unprecedented surge in demand, especially during the pandemic and the ongoing cost-of-living crisis. Many have been agile and innovative in their response, but even the most resilient organisations are not immune to exhaustion. Reserve funds are being depleted to stay operational, a strategy that may buy time but lacks long-term viability.

Compounding this is a recruitment challenge that continues to deepen. The VCSE Sector Barometer reports that 36% of charities are struggling to recruit staff—a reflection of growing workloads, rising stress levels, and sector-wide burnout.

The answer lies in collective strength. Stronger ties between public bodies and Third Sector organisations could pave the way for more sustainable solutions. We need ecosystems of support—not silos of struggle.

Confronting the Cost-of-Living Crisis Head-On

The cost-of-living crisis is not just hitting households; it’s squeezing the operational lifeblood out of non-profits. Rising salaries, shrinking talent pools, and mental health strains on staff and service users alike are placing the sector in a chokehold. Add to that the strained finances of health and local authority partners, and the risk is a systemic breakdown.

What’s at stake is more than balance sheets. It’s about the erosion of community resilience and the vanishing safety nets for those most in need. These challenges require decisive intervention, and they require it now.

Redefining the Government-Charity Compact

The next administration must forge a new social contract with civil society. The role of charities in national wellbeing can no longer be viewed as peripheral or supplementary. These organisations are integral to the fabric of British life.

While manifestos from major parties offer glimpses of intent, specifics remain thin. Labour and the Liberal Democrats have spoken about workforce strategies, with Labour focusing on disabled employment and the Lib Dems highlighting a comprehensive approach to skills development. The Conservatives propose boosting philanthropy, yet the scale and mechanism of this support remain ambiguous.

What’s required is not simply more funding, but strategic, sustained engagement an approach that empowers Third Sector organisations to thrive, not just survive.

The Road Forward

As the nation prepares to vote, the Third Sector stands at a critical juncture. The election presents a unique opportunity to reshape how we support and empower the organisations that lift our communities.

This is a call to action. For government, for civil society, and for all of us. Let us not only acknowledge the challenges but commit to solutions that elevate and endure. The health of our Third Sector is not a fringe issue it is central to a fair, resilient, and compassionate Britain.

The moment to act is now.

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