Professor Fred Robinson of Policy&Practice, St. Chad’s College, Durham University, looks at the economic outlook for the region – and nation.

Everyone knows that the Covid-19 pandemic has hit the economy hard and that we’re now in a deep recession. The lockdown forced the closure of many businesses, some of which may never reopen.

The Government borrowed heavily and spent money – “whatever it takes” – to keep the show on the road, retain productive capacity and stave off mass unemployment and poverty. But the reckoning will soon come. At the moment it still doesn’t feel too bad – or not as bad as it actually is.

Timely Government intervention masked the impact of the lockdown. Having shut down about a third of the economy, the Government brought in a furlough scheme to pay the wages of nine million people and also introduced measures to support the self-employed and small businesses. But the damage is becoming more apparent.

Unemployment is rising sharply as firms adjust to economic realities and cut jobs. It’s going to be much worse in the autumn when the Chancellor runs down the furlough scheme and the dire economic situation becomes far more evident than it is now. What should we expect over the next few months? There isn’t much optimism around.

The usually sober Bank of England is anticipating the deepest recession in 300 years, with the economy shrinking by 14 per cent in 2020. That would lead to at least a doubling of unemployment, with all the misery that would bring. The Chancellor is warning us to expect a “severe recession, the likes of which we haven’t seen”.

The OECD says the UK economy will contract more than any other developed economy. Of course, we don’t know what the future holds – and the forecasts of economists and politicians are often wrong. It is clear, though, that we are now in a major recession; the question is how and when will we come out of it? There’s an alphabet soup of possibilities.

A few weeks ago, the Bank of England was hopeful that there could be a quick and strong recovery, so this would be a “V-shaped” recession. Now, there’s less talk of such a “bounce back”. The easing of many lockdown restrictions will boost the economy – but that could well be a short-lived rebound, curtailed by rising unemployment and falling wages. Most likely may be a “U-shaped” recession, with months or even several years of little or no growth, then eventual recovery.

Probably worst of all, we might have an “L-shaped” recession, with the economy flat-lining for a long time. Not much better would be a “W-shaped” recession, as the economy is hit by new lockdowns in the wake of outbreaks of Covid-19. Add to all that the Joker in the pack: perhaps a no-deal Brexit.

What’s it to be? Much depends on how the Government responds to the pandemic and to the economic challenges ahead. The Government needs to very carefully scale back the furlough scheme and business support measures, sensitive to the problems of different sectors.

There’s a need to rebuild confidence and avoid flattening the economy by resorting to austerity. There’s a good case for spending public money while interest rates are effectively nil – public investment can get things moving again. Keynesian economics is back in fashion.

What are the prospects for the North-East? This is an unusual recession not just because of its causes and severity, but also its geography. In past recessions the North-East has usually suffered most. This time, the impacts are spread across the country and across many sectors. The North-East will suffer along with the rest of the country, but starting from a position of less favourable economic circumstances than many other areas.

Within our region, some places and some groups may well have a harder time than others. Lower paid workers and the young are particularly vulnerable – they need a strong and quick recovery much more than the professionals in well-paid jobs who’ve been able to work from home. Tourism and the hospitality industries have been particularly hard hit, and tourist destinations in places such as North Yorkshire and Northumberland could struggle to recover.

It’s difficult to be optimistic about the future for High Street retailers or for pubs, cafes and restaurants coping with social distancing measures. Our university cities like Durham and York have been missing the spending power of students – and will take a big hit from reductions in international students next academic year.

There’s talk about the need for a Green Recovery, a fairer tax system and job creation schemes, as part of a programme of progressive social, political and economic reform and revival. Labour says it’s a 1945 moment, a time for radical reconstruction and renewal. A Conservative Government is, however, more concerned to get back to some kind of familiar normality – a hope probably shared by most people.

But the “back to business as usual” recovery is a hard trick to pull off. While the Government’s handling of the pandemic itself has been inept, the response to the economic crisis has, so far, been impressive. The Chancellor now has to get things moving again, somehow rebuilding consumer confidence, and also bringing hope to “left behind” people and places – while coping with the continuing challenges of the pandemic.

It’s a time for imaginative intervention and competent government. Here in the North-East we know what recession is like, how painful and destructive it is. We have to hope that with luck and effective Government action we can avoid a return to the hard times we experienced in the 1980s. A better future is possible.

Fred Robinson is a Professorial Fellow at St Chad’s College, Durham University

First published in the Northern Echo on 4th July 2020. The original article can be found at this address: https://www.thenorthernecho.co.uk/business/18551669.a-time-imaginative-competent-government/

We’ve launched our reports from Third Sector Trends today.  But we wanted to ask one of our questions again to see how people are feeling now following the onset of the Covid-19 crisis.

Here’s the link: One Question Survey

It takes less than a minute – unless you want to tell us something more – as many people do:

“I am concerned that there seems to be a lot of micro-grants around to help people and community organisations through Covid-19, but very little for the medium-sized organisations to ensure that their long term service provision remains available.”

“It’s tough at the moment but we have learnt new things and more remote working will continue. It makes us more agile and suits our team. And we must all work in collaboration to help the increasing numbers who need our support.”

“All of our charity members and volunteers are all in the “Third Age” Many are shielding and most are very concerned about resuming normal activities until a vaccine is available. Social distancing would be impossible for 80% of our activities.”

“Reducing lockdown has so many unknowns. The pressure to return to delivering services had to be balanced with the welfare of volunteers. The potential of a second wave of infection increases anxiety levels.”

“The strains on households during the recovery are going to be huge. As we deal with the elderly who have been in lock down they are now very worried about leaving their homes. We need to continue to look after their welfare.”

“Small charities like ours will really struggle to gain grant funding, as the focus of funders has changed to Covid-19 work. Our work is as important and has been for over 25 years, as we go to see our clients in their own home offering long term help and support to have a quality of life.”

“Donations from individual members have increased, but donations from visitors has inevitably decreased. None of the ‘help’ put forward to be applied for by the Lottery or Historic England fits our situation. When you have stood on your own two feet and never had their help, you can’t show a track record to meet their criteria.”

“We support disabled people to run a cafe. Don’t know when we will get back as can’t see how we can socially distance and support at the same time.”

Here’s the link: One Question Survey

And if you want to see our reports from the North East and North West of England or Yorkshire and Humber click this link: Third Sector Trends in the North

Third Sector Trends is a long-term study of the voluntary and community sector which began in 2008 in North East England and Cumbria.

In 2016 surveying began right across the North West region. This has been repeated in 2019 providing a unique resource of evidence which is widely used by policy makers and practitioners.

As such it forms part of a wider study which runs across the North of England. All reports from the study are hosted by Community Foundation serving Tyne & Wear and Northumberland who fund the study in North East England and are responsible for its legacy. All reports can be accessed here.

The full North West England report on the 2019 study can be downloaded here: THIRD SECTOR TRENDS IN NORTH WEST ENGLAND 2020

Third Sector Trends is a long-term study of the voluntary and community sector. It began in Yorkshire and Humber in 2010 with a baseline study of the structure and scale of the sector.

In 2013 surveying began across the region. This has been repeated in 2016 and most recently in 2019.  This provides a unique resource of evidence for Yorkshire and Humber which is widely used by policy makers and practitioners.

As such it forms part of a wider study which runs across the North of England. All reports from the study are hosted by Community Foundation serving Tyne & Wear and Northumberland who fund the study in North East England and are responsible for its legacy.

The full Yorkshire and Humber report on the 2019 study will be published on 18th June 2020 by Community Foundation serving Tyne & Wear and Northumberland alongside all other reports from the research programme, and can be downloaded here: Third Sector Trends in Yorkshire and Humber 2020.

Alternatively you can download the report here: THIRD SECTOR TRENDS YORKSHIRE AND HUMBER 2020

A Tale of Three Sectors

The world was a very different place when the latest Third Sector Trends survey for the North West closed in December 2019. The relative stability of the sector highlighted in previous reports is reflected in the latest report but will that still be the case in a post-coronavirus world in 2020 and beyond?

At this launch Professor Tony Chapman will present the latest findings from Third Sector Trends but will look at the situation of the sector through a contemporary lens. He will argue that it is better to look at the probable social and economic consequences of the Covid-19 pandemic in a more focused way than is currently being featured in the media.

A Tale of Three Sectors will look at the situation of small, medium sized and larger charities and social enterprises – to make an assessment of their future prospects.

This ground-breaking longitudinal study explores the scale, dynamics and needs of the voluntary, community and social enterprise sector in the North West and looks at what the sector can promise to achieve for its beneficiaries.

The report, based on a representative sample of over 3,000 organisations in the North, is the latest of a series of reports that began in 2008. This gives the study a long-term view not available from other research on charities and community organisations regionally or nationally.

The event will be hosted on Zoom and a link will be sent out the day before. To sign up for the event, click this Eventbrite link A tale of three sectors

This event will feature presentations from:

Professor Tony Chapman (St Chad’s College, Durham University) on the findings of the survey.

Jack Hunter (Institute for Public Policy Research) on the consequences of these findings for the North.

Warren Escadale (Voluntary Sector North West) on how these findings could feed into conversations we’re having around recovery for the region.

This event will also include an opportunity to ask questions directly by participants.

The full report will be available on the Community Foundation serving Tyne & Wear and Northumberland Website on 18th June. If you would like to download the report, please click here: Third Sector Trends in North West England.

In an article in The Guardian yesterday it was claimed that 10% of charities could collapse. Yes, times are going to be tough for a lot of charities in the social and economic aftermath of Covid-19. The sector is not collapsing now and will not do so in the future. There will be casualties and that is sad. But we need to get things into proportion argues Tony Chapman in a blog today.

Are one in ten charities facing immanent collapse? I don’t think so.

The fifth iteration of the Third Sector Trends study in North East England is published today and will be launched in a Community Foundation Tyne & Wear and Northumberland webinar. The report, based on a representative sample of over 1,000 organisations, takes a long-term view not available from other research on charities and community organisations regionally or nationally.

The recent findings paint a picture of a sector that, having stayed fairly resilient during and after the financial crisis had, by December 2019, started to see small increases in the number of organisations, employees and volunteers. Comprising 7,200 organisations, 38,250 employees and 154,000 volunteers, the sector is a significant part of the North East ecology.

Already playing an important role in supporting many vulnerable people during the Covid-19 crisis, the latest findings give an insight into how the sector in the region may fare after Covid-19.

Many charities, community groups and social enterprises will suffer financial hardship as the economy reels from the Covid-19 pandemic. But this report shows that organisations with different characteristics will respond to the challenges ahead in a variety of ways. Drawing these distinctions will be useful, it is hoped, to grant making foundations and public sector bodies which support the Third Sector.

Rob Williamson CEO of the Community Foundation said:

“When we commissioned this latest edition of the Community Foundation’s Third Sector Trends Study, we could never have envisaged the extraordinary circumstance we’d be in when it came to sharing the results. Over twelve years, Third Sector Trends has reported on the financial crisis and impact of austerity. The pre-Covid-19 data reveals a sector finally coming out the other side. This raises critical questions about how charities and community organisations will come through the current crisis. But, as Prof Chapman says, the findings give funders, policy-makers and sector organisations an opportunity to pause, reflect and look at the big picture rather than becoming overwhelmed by the here and now.”

The author of Third Sector Trends, Professor Tony Chapman, said:

“Previous Third Sector Trends reports have drawn some criticism for being ‘too optimistic’. Our results often run contrary to assumptions, and don’t mirror the findings of small scale, one-off surveys. But, as a long-term study, now running for 12 years, our data will provide vital comparative evidence to inform thinking in these enormously difficult times. The money side of things is extremely worrying now, but the sector does not run just on financial resource – it is fuelled by the ideas, values and work of the people who work in it. Few of them will be ready to throw in the towel. Many will be more determined than ever. whatever comes next, we know civil society is here to stay.”

The full report, a shorter summary report and an infographic which captures key findings  will be available on the Community Foundation website on May 27th, 2020 at this web address: https://www.communityfoundation.org.uk/knowledge-and-leadership/third-sector-trends-research/

Or you can download the full report here: THIRD SECTOR TRENDS IN NORTH EAST ENGLAND 2020

And a summary report here: SUMMARY REPORT Third Sector Trends 2020 in North East England

The launch presentation slides, from 27th May, are available here: NORTH EAST TST LAUNCH PRESENTATION 27th May

Professor Fred Robinson, of Policy&Practice, shared his views on what the ‘new normal’ might be in a leader article for the Northern Echo,  published on 29th April.

One day, this awful pandemic will be over. Or at least the crisis will have passed. It is possible to imagine a time when the situation will be under control. There will be far fewer new cases and widespread testing and contact tracing will be used to control infection. Better treatments will have been developed and – we hope – there’ll be a safe and effective vaccine to support an exit strategy.

We certainly aren’t there yet. But now, as we see at least a glimmer of light at the end of the tunnel, thoughts can turn to what the future holds, after Covid-19. Will we be returning to normal, to “business as usual”? Or will things be very different? A sign on the A67 at Barnard Castle The next few months will be difficult. Recovery will be slow. Restrictions will be eased, but then may need to be imposed again if there’s an increase in infections and hospitals are under renewed pressure. Social distancing is going to have to continue for a long time. People will be fearful. Of course, much depends on when (and if) a vaccine becomes widely available. And in all this there’s the international dimension – gradual recovery in the UK will be overshadowed by desperate suffering in the world’s poor countries.

One thing we do know. The economy will be in deep recession. UK government spending has had to increase substantially to support businesses and households hit by the lockdown. Government borrowing is rising fast as tax revenues plummet. The backdrop is a global slump, at least as bad as the Great Depression of the 1920s, and a lot more sudden. Unemployment will rise and household incomes drop. Some economists think the UK economy could bounce back quite quickly, but that feels like wishful thinking. Many businesses will have gone bust. UK companies exporting products and services will be affected by weak demand and global oversupply, their difficulties quite possibly compounded by post-Brexit problems.

Worried domestic consumers are going to be reluctant to spend, adding to recessionary pressures. But this has to be a time for hope, not despair. This trauma has certainly made us all think and it could prove to be a pivotal moment when we choose a different path. We could learn some important lessons from this. Crises focus the mind on what really matters. Everyone is well aware of the vital importance of key workers who are keeping things going during the lockdown. There’s a renewed appreciation of the NHS and of people working in care homes. There’s recognition of the immense contribution of staff from BAME communities and from overseas. Shop-workers, delivery drivers, and those working for the utilities are seen to be essential.

There is also a new awareness of the role and responsibilities of the state. We look to the government to act – and we see how important it is that the state is competent and ready to intervene to support the society and economy. The importance of international co-operation is also clearly revealed – a virus doesn’t recognise borders. And of course we really are all in this together. Within local communities there has been an upsurge of mutual aid, volunteering and neighbourliness. There’s a palpable intergenerational solidarity. Every day The Northern Echo has uplifting stories of people helping each other. The selfishness that’s been a strong element in our culture since the 1980s is unacceptable in such a crisis.

I hope that we will learn lessons from this experience and not just try to put it behind us and get back to “normal”. This pandemic has shown how fragile our lives are. It could be taken as a wake-up call, reminding us of all the issues we’d prefer not to think about. We were dimly aware that a virus like this could threaten us, but did nothing about it. Our government, like others, was unprepared and has struggled to catch up. There are other major threats on the horizon. Climate change is an emergency, but the response to it is clearly inadequate. There are serious problems with global food production, especially livestock production – which could generate viruses far more lethal than Covid -19 as well as promoting antibiotic resistance.

Our way of life, based on endless economic growth, is environmentally unsustainable. The hope, then, is that we do everything we can to address these issues and avoid another terrible and destructive crisis like this one. We can draw on a renewed understanding of what matters, how problems need to be tackled and how we can all work together to build sustainability and resilience. Here in the North-East we can draw on traditions of solidarity and community. But it’s a big challenge. After this crisis, things will be different – and maybe they need to be.

The article can be downloaded from the Northern Echo Website, at this address: https://www.thenorthernecho.co.uk/news/18410481.covid-19-new-normal-look-like/

Civil society in North East England is in good shape. Around 7,000 voluntary and community organisation and social enterprises serve the interests of their beneficiaries. Much of their energy comes from people who give their time and expertise as trustees and volunteers. More than 150,000 people deliver more than 10m hours of work at no financial cost to the region.

Charities need money too for wages, rent and kit to get things done. Some of these costs can be met from fundraising, endowments, investments, subscriptions, charging for services or delivering contracts. Only rarely can charities earn enough on their own to keep going. Grants provide a bedrock of additional funding for civil society.

More than 50 charitable trusts and foundations inject financial resources into civil society in North East England. Each year, well over 4,000 grants are awarded with a combined value of at least £50m.

Charities tend to be ambitious and competitive and demand for grants outstrips supply. They must make ‘claims’ on what they regard as important priorities and ‘promises’ on what they can do to tackle these issues. And because so many voluntary and community organisations work in the same areas, on similar or inter-related issues, clear sector-wide priorities are hard to discern. Foundations face a difficult task. In the face of high demand they must make choices. So, they do not merely ‘serve’ civil society – they ‘shape’ it too.

Community Foundation serving Tyne & Wear and Northumberland commissioned this research in 2019. It involved in-depth work on 25 national and regional charitable trusts and foundations. Its purpose was to ask this question: ‘Should foundations work together much more closely, with shared strategic objectives in mind, to maximise the benefit to North East England from their collective effort?’

This report argues against too much formal and shared strategies because trusts and foundations achieve more by retaining their autonomy but working together in complementary ways or as good neighbours to one another.

The strength of weak ties: how charitable trusts and foundations collectively contribute to civil society in North East England, by Tony Chapman was published on 5th February 2020

All Third Sector Trends reports are available on the Community Foundation website which can be reached here

Here is a link to the full report: CFTWN Strength of Weak Ties (Full Report) February 2020

And you can read the summary report CFTWN Strength of Weak Ties (Summary Report) February 2020

A blog on the key findings can be found here

2019 was a busy year for us – completing several projects, continuing with new ones and starting the new Third Sector Trends study. Our engagement work with the public, private and voluntary sectors last year involved the organisation of several events too.

If you want to read all about it, here’s a link to our Policy&Practice Annual Report 2019