By Claire Racine

The third sector is showing signs of renewed optimism in the UK economy and a growing number of charity leaders believe economic conditions in the UK will improve over the next 12 months, according to the National Council for Voluntary Organisation’s (NCVO) latest quarterly Charity Forecast Survey.

Overall confidence levels are up 28 percentage points compared to the previous quarter; however, 37% of respondents still fear that conditions are set to worsen for their own organisation in the next 12 months.

The forecast, based on responses from chief executives, directors, trustees and senior managers of charities and voluntary sector organisations, revealed that 46% of charity leaders plan to increase their services, despite having to balance increased demand and falling resources during the recession.

Of the 139 sector leaders surveyed, only 7% of charities plan to decrease their services during the next three months.

“Despite the economic downturn, these results show a sense of cautious optimism emerging within the sector,” said Stuart Etherington, NCVO chief executive.

“With almost half of charities planning to increase expenditure over the coming months, it’s good to see the sector is showing its determination to weather the economic storm.”

In fact, many sector leaders are planning to work more closely with other voluntary groups, with 68% expecting collaboration to increase.

Even though the report shows a growing sense of confidence in some areas of the voluntary sector, only 31% of those surveyed plan to increase the number of paid staff over the next three months.

“While the forecast shows some encouraging signs, the sector faces tough challenges ahead,” Etherington said. “NCVO will continue to work with Government to help our members unlock the vital resources they need.”