Joint Statement | Sustaining community impact through funding transition and political change in Wales

Voluntary organisations, social enterprises and community groups form a core part of Wales’ social and economic infrastructure. They deliver essential services, generate local employment, mobilise volunteers and provide critical support during periods of crisis and transition.

In 2025, the voluntary sector contributed an estimated £9.1 billion to the Welsh economy and alleviated pressure on public services by at least £1.4 billion. Wales’ social enterprise sector continues to grow in strength, scale, and impact, with over 3,100 social businesses now active across the nation, contributing up to £5.7 billion to the Welsh economy each year and delivering essential services for people and communities. This impact is underpinned by stable, skilled and locally-rooted community infrastructure.

That infrastructure now faces significant risk.

A funding transition that threatens community delivery capacity

The end of the UK Shared Prosperity Fund (UKSPF), combined with the introduction of new mechanisms such as the Local Growth Fund and Pride in Place, represents a major shift in Wales’ regional funding landscape; it is a fundamental shift in funding design.

UKSPF provided substantial revenue funding that enabled organisations to retain staff, maintain services, build community capacity and deliver long-term outcomes. By contrast, the emerging landscape places greater weight on capital investment, with far fewer clear or reliable avenues for revenue support.

For many community-based organisations, this creates a structural imbalance. Capital investment can be transformative, but without sustainable revenue funding for delivery, staffing, maintenance and community engagement, those investments will fall short of their intended impact.

There is a genuine risk that Wales invests in physical assets without sustaining the organisations that ensure those assets deliver value.

Compounding pressures on an already-fragile sector

This funding transition coincides with a period of heightened pressure. Rising costs, workforce shortages, increased demand for services and reduced financial resilience -following several years of crisis response – have left many organisations vulnerable.

The loss or interruption of revenue funding at this point will not simply slow progress, but will lead to the departure of skilled staff, the contraction or closure of organisations and the erosion of trusted community provision – capacity that is costly and time-consuming to rebuild.

The result is a widening gap between what is expected of the voluntary and social enterprise sectors and what they can realistically deliver.

Political change and decisions that cannot be deferred

With a Senedd election approaching, there is uncertainty.

At the same time, this represents a significant opportunity to shape a positive policy environment for the social enterprise and voluntary sectors. Long-term solutions to today’s challenges can be found in our organisational manifestos which set out a long-term vision for the sectors we support.

This moment presents both significant risk and strategic opportunity. Wales needs to embrace opportunity and take deliberate action to stabilise and strengthen social enterprise, voluntary and community capacity.

Immediate Actions Required

We are calling for the following measures:

• Transitional revenue support to bridge the gap between UKSPF and new funding programmes, preventing disruption to essential community service
• A more balanced approach to capital and revenue funding within programmes such as the Local Growth Fund and Pride in Place, reflecting the operational realities of voluntary and social enterprise delivery.
• Early, meaningful engagement with sector bodies in the design and implementation of new programmes, before delivery models are finalised.
• Clear and accessible transition plans and timelines to enable responsible workforce planning and organisational stability.

These steps are practical, achievable and essential for safeguarding public value and ensuring that new investment delivers long-term, sustainable impact.

Our Role and Commitment

Cwmpas and WCVA stand ready to support this transition by providing:

• Evidence-based analysis and recommendations
• Real-time intelligence, case studies, data and insights from organisations across Wales