Youth centres at risk as utility bills consume half their total budgets
Youth clubs are spending as much as half their budgets just to cover energy and water bills, putting vital community services at risk, a new report published today finds. The warning comes from Scouts, youth workers and charities at the start of so-called ‘awful April’ with prices of energy, water and more all set to rise.
Charity run youth services support millions of young people across the UK, improving their mental and physical wellbeing, providing life skills and reducing anti-social behaviour1 with recent research showing that for every £1 invested in youth work, the benefit to the taxpayer is at least £3.20 through improved physical and mental health and reduced crime2.
Yet a new report from finance charity Social Investment Business (SIB) shows how these vital services are under strain from ballooning energy and water bills. Youth centres could even be at risk of closure from the combined impacts of rising costs and new government policies on energy efficiency, the report warns.
Margate Sea Cadets are one organisation which has had to allocate 49% of their budget just to cover utility bills like energy and water. The group is at the heart of its community and has served local youth for more than 100 years. They provide activities for young people aged 9-18 including rowing, sailing, adventure activities and parades.
Paul Holton, volunteer and Chair of Margate Sea Cadets, says "When we're raising funds, we're constantly aware that half of that money is going to just pay for the bills. It's very demoralising, we're thinking about that constantly.
“Local youth provision here is under risk from rising bills and funding cuts. Without these groups the social problems that would come out would cost much more than if we get support now.”
Charities vulnerable to rising costs
Households, businesses, and charities are all facing rising utility bills, with this month being dubbed ‘awful April’ as costs of energy, water, internet and more continue to increase.
Charities are particularly exposed to rising costs, and especially youthwork organisations which often have small turnovers and tight budgets. Unlike households, charities are not covered by a price cap to shelter them from the extremes of price rises, and short-term government schemes set up at the height of the energy crisis have now ended.
The report published today by SIB found that on average small youth charities in England are now spending 13% of their outgoings on utilities, with many having to spend well above this average, as much as 50%. For comparison, the average household spent 7.9% of their weekly spending on utilities at the height of the energy crisis in 22/23, according to the ONS.
SIB’s report calls for urgent government action to address these rising costs for youth and other community groups, proposing a 0% VAT rate for charity energy bills, and arguing for the additional levies currently added to electricity bills to instead be raised through taxes on the wealthiest – which would then reduce energy bills for everyone.
Draughty buildings drive up bills
Combined with rising costs, the research found that youth centres and community buildings are often poorly insulated. Draughty buildings are driving up their bills even further, but groups lack the resource needed to improve their insulation.
Without action, these youth clubs and community groups could now be at risk of losing access to their buildings and seeing their services close. Due to new government plans being consulted on, groups using and renting spaces below basic energy efficiency levels could face difficulties securing funding or hefty fines that put their work at risk.
Investment brings huge change
However, for some youth centres significant government investment has transformed their buildings and, as a result, their bills. In Sheffield, a brand new, state-of-the-art Scout HQ has been built thanks to a £1.8million grant from the Youth Investment Fund, money provided by the UK government and delivered by Social Investment Business in partnership with the National Youth Agency (NYA), Key Fund and Resonance.
The new 105th Sheffield High Green Scout HQ is one of over a hundred youth facilities to benefit from the Youth Investment Fund, and is now equipped with solar panels, a heat pump and battery storage, and was designed to be a Net Zero building, providing a fresh space for their thriving group. A long way from their previous 60-year-old scout hut, which was falling apart, with no insulation and expensive to heat.
Tom Hague, Assistant Group Scout Leader at Sheffield Scout Group, said: “The Youth Investment Fund has secured the future of our Scout group for future generations, and is enabling us to grow, delivering more essential skills for life to more young people.”
“As a charity with limited income, ensuring overheads are kept to a minimum are essential to allow us to survive, and it means we can spend more money on activities for young people instead of energy bills.”
Large scale investments like these can make an enormous difference to each property, but to sufficiently lower bills across the whole of the youth and community sector, as well as businesses and households, wider reforms are needed.
Aidan Jones, Chief Executive of Scouts, says:
“Scout groups from all over the country have told us about the pressure that rising energy bills are putting on their budgets. At the same time, parents and carers are also feeling the strain of increasing household expenses.
Groups are doing everything they can to keep activities affordable, but with prices continuing to rise, we want to see greater support for charities and voluntary groups to ensure young people don’t miss out.
Uniformed youth organisations like Scouts provide vital opportunities for young people to develop essential skills for life. Now more than ever, children need these safe spaces to build resilience, foster a sense of belonging, and reduce loneliness.
Nick Temple OBE, Chief Executive of Social Investment Business, said:
“Rising energy costs are putting vital youth services at risk, undermining their work in towns and cities across the nation. Without these groups young people could lose community, confidence and safe places to go.
“The current structure of electricity bills is regressive and unfair, forcing youth groups, charities, and households in the most deprived areas, to contribute disproportionately more of their income to levies and taxes on energy. Raising that money through a wealth tax instead would be an opportunity to lower bills for everyone, while shifting the burden of the energy transition away from the poorest.”
