Underfunded and underestimated: Grassroots and community groups as the missing link to understanding poverty in the UK

Governments get replaced, political objectives change, and funding chases the next big issue. What remains are the same problems, and in the case of poverty in the UK, hardship continues to worsen. It’s been 20 years and six prime ministers since poverty last saw a lasting decline.

While the tides of policy fluctuate, grassroots and community groups within the Voluntary, Community and Social Enterprise (VCSE) sector remain firmly rooted, staying focused on the real issues that affect people and filling in the gaps left by policies shaped by misconceptions about poverty and those who endure it.

However, the CSJ report ‘Underfunded and Overlooked’ uncovered that government investment in charities with an income below £1 million fell by £413 million from 2013 to 2020, with half of small charities receiving no public sector income at all.

Despite their advantage to build trust in communities, advocate for people’s needs, address local issues and boost involvement, they continue to be a largely untapped resource. As a result, the funding and policy landscape has been shaped by top-down assumptions rather than lived experiences. 

A shift is needed. One where commissioners and funders champion community-led initiatives through sustained investment, enabling people in hardship to shape the decisions and services that directly affect their lives. 

Value of Voice 

Incorporating lived experience is central to grassroots movements and essential for shaping effective policies and services. Grace Sodzi-Smith, who supports ten grassroots initiatives for the Social Change Agency, says these groups “hold greater insight to develop better solutions than any market research team. No survey or body of research can imitate real lived experiences.” 

However, these groups do more than simply highlight the experiences of those living in poverty, as APLE Collective, a grassroots network, explained to Quids in!. They emphasize the importance of “harnessing the skills, knowledge, and creativity of those with lived experience of poverty to create real solutions.” As they put it, “We are not just people living in poverty; we are lived experience activists, artists, nurses, practitioners, parents, and children. Our voices are just as important as anyone else’s.”

The Collective warns against superficial ‘tick-box’ engagement and advocates for a peer-led model that delivers ‘real-world’ outcomes. Take their Chair of Trustees, Brian Scott, who draws on his own experiences of hardship and disability to advocate for others in similar situations: “Through APLE, my voice and others like mine have been heard at the highest level, both in government and in local authority areas.”

Trickle-down assumptions 

Bringing lived experience to the highest levels of decision-making is crucial, as highlighted by Professor Ruth Patrick’s critique of the Conservative government’s approach to Universal Credit. She criticizes the ‘test and learn’ method used to roll out Universal Credit, arguing that if policymakers had better understood the needs of claimants—such as the necessity of regular cash support—they would have anticipated the problems caused by leaving people without financial assistance for five weeks.

“What was missing from this approach,” she writes, “and what Labour can and must do differently is to actually listen to claimants; to take on board their own needs, preferences and experiences; and to better understand the fabric of their everyday lives.” 

The government isn’t the sole bearer of these assumptions; those in the third sector are equally susceptible. David Jenkins, Social Prescribing Project Manager at Bath & Northeast Somerset 3rd Sector Group (3SG), told Quids In!: “We try to fix people’s problems by giving solutions or services, rather than listening to what communities want and need.” Jenkins believes adopting a person-centred approach is crucial to countering the “arrogance” that professionals always know best.

‘Hard’ Outcomes 

However, the pervasiveness of top-down decision-making affects more than just how poverty and hardship are approached. It also shapes the very foundation of services and initiatives, including the criteria for measuring ‘success.’ By focusing on outcomes dictated by these higher-level assumptions, more emphasis is placed on easily measurable results, often at the expense of addressing more complex, individualised needs.

These issues are illustrated in the 2022 report ‘Systems change for people experiencing multiple disadvantage,’ which summarises two years of research with Fulfilling Lives Lambeth, Southwark, and Lewisham. The study explored new ways to support people facing multiple disadvantages, revealing that support services and professionals often fail to recognise the unpredictable, non-linear nature of people’s recovery journeys. Instead, many services impose rigid, one-size-fits-all pathways that overlook the reality of relapse.

The report notes that “services often assume that people should have ‘recovered’ after a particular period of receiving support,” and when additional help is needed, it is often unavailable. Had there been a better understanding that recovery is rarely a straight path, as participants suggested, these assumptions would likely have been avoided.

This lack of understanding extends to how services measure success. Commissioners often prioritise measurable “hard” outcomes like employment and housing, often neglecting essential “soft” outcomes such as confidence and relationship-building, which can be just as significant to the individual. Conditional support structures complicate access further, sometimes penalising individuals for not meeting predefined targets.

Since funding decisions are often driven by these hard outcomes, smaller organisations struggle to compete. Larger, more established charities and organisations, better equipped to meet these predefined targets, have a clear advantage.

Who holds the pot?

A poll from the CSJ report ‘Underfunded and Overlooked’ revealed 76% of UK adults agree that small, local charities understand communities better than organisations such as governments or larger, national charities. And yet, funding does not reflect public opinion, with 85% of all charitable income in England and Wales allocated to only 4% of registered charities. 

Regardless of their track record, larger charities, typically functioning nationally, are given funding priority. The Fulfilling Lives report notes how commissioning systems can work against them. “Commissioners are often incentivised to give contracts to larger organisations that can achieve economies of scale, take on greater financial risks, demonstrate ‘value for money’, use ‘tested’ approaches, and have the systems required to ensure quality and monitor outcomes.”  

Smaller charities and initiatives often lack the infrastructure – staff, networks, time, or fundraising expertise – to compete. This imbalance in funding has a direct impact: over the past 10 years, 97% of charity closures have been among small and medium-sized organisations.

Community-led organisations are often left to scramble for scraps, relying on short-term funding that limits their scope of impact and contributing to inconsistent and unconnected support. During the Social Change Agency’s Risky Business panel, community economist Nonhlanhla Makuyana emphasised that ‘giving a little bit doesn’t create the sustainability needed to build strong movements that take us to the future we want to get to. To truly support grassroots initiatives, they must receive sufficient funding—not just to survive, but to thrive.'”

Stronger roots 

What is needed is greater, more targeted, and sustained investment in community-led initiatives to generate valuable outcomes in the fight against poverty, as highlighted by research from Joseph Rowntree Foundation (JRF) and Sheffield Hallam University. However, with commissioners and funders facing financial constraints and a reluctance to take risks, collaboration becomes crucial to ensure resources are used efficiently and sustainably.

Luke Maynard from The National Lottery Community Fund points out that while grassroots organisations are “nimble and quick”, they need larger organisations for support in areas like safeguarding and digital capabilities. At the same time, local authorities require grassroots groups and larger charities for local knowledge and volunteer networks.

Research from LSE Housing and Communities further emphasises the value of symbiotic relationships, showing how anchor organisations like housing associations can provide essential resources–such as venues and expertise–while gaining insight from the deep local knowledge of community-based VCSEs.

Jessica Studdert, Chief Executive of the independent think tank New Local, writes in her article Breaking the Cycle of Hardship, that while traditional, state-led approaches have failed to close the poverty gap, “integrated local systems that can genuinely share power and support agency just might.” Her words echo the role of grassroots organisations, which, unlike the ever-changing landscape of government policy, remain firmly anchored in their communities, continually addressing the real issues people face.

By investing in sustainable funding, fostering partnerships, and valuing community expertise, we can build a more resilient and responsive support system that genuinely reflects the needs of those living in poverty. What’s needed now is not just temporary fixes, but lasting, bottom-up change.

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