Business

Shrinking third sector a cause for concern warns economist

Ulster Bank chief economist Richard Ramsey believes a shrinking third sector is potentially a significant concern for Northern Ireland
Ulster Bank chief economist Richard Ramsey believes a shrinking third sector is potentially a significant concern for Northern Ireland Ulster Bank chief economist Richard Ramsey believes a shrinking third sector is potentially a significant concern for Northern Ireland

A SHRINKING third sector could pose significant problems for the Northern Ireland economy, a leading economist has warned.

The latest Ulster Bank and CO3 3rd Sector Index has revealed that almost 60 per cent of leaders expect the sector to become smaller in three years, as funding and other pressures continue to impact on it.

Chief economist at Ulster Bank, Richard Ramsey believes that with increasing pressures on the health service and a scaling back of public spending, the third sector has a central role to play in delivering key services.

“With demand for some of the services that the third sector provides rising, what we don’t want to see is a reduced capacity to deliver the kind of key services that society and the economy needs more and more."

"With pressures in the public sector and significant spending cuts, the third sector can potentially provide a cost-effective solution. The onus is on the sector to restructure in an effective way. But there is also an onus on government to ensure sustainable funding for organisations that deliver badly needed services," Mr Ramsey said.

The Ulster Bank and CO3 3rd Sector Index is a barometer of Northern Ireland’s third sector, involving a quarterly survey of CO3 members, who include the leaders of some of Northern Ireland’s largest charities and social enterprises.

The latest index points to significant concern within the sector about the environment that they are operating in. More than 75 per cent of leaders say that the lack of a Northern Ireland Executive is impacting negatively on their organisation due to resulting funding issues, a lack of decision-making, and uncertainty.

Looking forward and those surveyed paint a bleak picture for 2018. A total of 73 per cent of those surveyed said they expect the political situation in Northern Ireland to become less stable in the year ahead, while 66 per cent expect the economy to deteriorate. In addition, 80 per cent believe that the recent UK Budget didn’t offer any recognition and support for the work of charities and social enterprises.

Nora Smith, chief executive of CO3 said the political and economic outlook for the third sector in 2018 is a "challenging one".

"The political deficit a key issue for our members, including a lack of confidence in the Brexit talks and how Northern Ireland is being represented in them."

"The third sector plays a significant role in driving forward and leading social change, as well as adding to economic growth in our region, and it is worrying that such a high proportion of respondents expect a reduction in the overall size of the sector within the next three years.”

Bryson Group CEO, John McMullan said the social enterprise has experienced an increasing demand for its domiciliary care services, driven by the growing needs of our aging population.

"Urgent political and funding decisions regarding rebuilding this sector and workforce are critical if demand and need are to be met and much needed job creation is to be achieved," he added.