Edition 19 Providing support through the stages of the business cycle


This business cycle case study looks at the phases of the business cycle and how these influence UNISON’s There for You, both operationally as a charity and also with the provision of support services its members require.

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Everybody faces a degree of uncertainty within his or her daily lives. No matter how well people plan, it is impossible to get rid of all of the risks. Some of these risks could be financial. Although individuals may be good at organising their finances or dealing with shock events, some may need help and advice in times of need. Unexpected situations can be difficult to deal with when they arise. This case study introduces the role of ‘There for You’, the registered charity established by UNISON to benefit its members and their dependents, including retired members.

With more than 1.3 million members, UNISON is Britain and Europe’s largest public service union. Members work for the public services, for private contractors providing public services and for essential utility organisations. These include local authorities, the NHS, the police service, colleges, schools, universities as well as the electricity, gas and water industries.

As a large trade union, UNISON exists to protect and promote the interests of its members. For example, one of the key roles of a trade union is negotiation involving collective bargaining with employers. UNISON also represents and supports member employees in other areas such as discrimination, harassment at work, equal pay and safety in the work place. In the current economic climate, this is not easy. As the coalition government continues to make spending cuts to public services, UNISON and its members face many new challenges.

There for You

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There for You was established in 1993 to benefit members of UNISON in times of personal difficulties and hardship. The charity itself has a history of helping trade union members working in public service spanning more than 100 years. This is a unique selling proposition (USP) for UNISON as it helps to distinguish the support that UNISON provides from other trade unions. There for You helps UNISON members struggling with the pressures of everyday life or an unexpected crisis. The charity offers advice, support, debt advice and financial assistance. For example, members can apply for financial support to assist with household energy bills or the cost of school uniforms. The charity also provides ‘wellbeing breaks', for instance, where members have been ill, suffered a bereavement or where a family could benefit from some time away from the family home.

The financial pressures placed on individuals change over time. This is because they are affected by external circumstances such as high unemployment, recession and the rate of inflation. The business cycle illustrates the scope and size of these changes. This case study looks at the phases of the business cycle and how these influence UNISON’s There for You, both operationally as a charity and also with the provision of support services its members require.

The business cycle

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A business cycle is something that occurs over time in all economies across the world. A sequence of events, both positive and negative economic activity, takes place during the cycle. These stages of the cycle keep repeating over time and over a number of years. The business cycle consists of the following periods; boom, downturn, recession and recovery.

Gross Domestic Product (GDP) is the value of goods and services produced in an economy over a given period of time. Within the UK economy, the level of economic activity constantly changes. When times are good UK organisations in both the public and private sector create more goods and services. This is known as a boom. This period does not last forever. It will reach a peak and then there is a downturn. This downturn, if it continues, will become a recession. As the recession reaches a trough, organisations are producing fewer goods and services. Then a recovery takes place as the economy lifts itself out of the recession.

Changes in economic activity

It is sometimes difficult to predict these changes in economic activity. For example, it is not easy to identify when booming economic activity is reaching a peak. Nor is it possible to predict the depth of a recession. Organisations respond to the waves of a business cycle in different ways, for example, by increasing or reducing output and staffing. This cycle and its activities, as well as the actions governments take during the cycle, has a significant impact on members of UNISON.

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UNISON has a key role in understanding, managing and anticipating the impact of the business cycle upon its members. Although There for You is a registered charity, it has to demonstrate a return on investment (ROI). For this reason, it has to react to changes in the business cycle by developing plans and strategies in the same way that a commercial business would do. The services that it offers through the different phases of the cycle need to reflect the needs of UNISON members. This involves constantly reviewing its investment strategy to ensure that financial targets are delivered.


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A boom period is one where economic growth takes place. During this period consumer spending, business investment and GDP increase at a growing pace. The economy grows and develops a higher capacity, employment increases and businesses often have to pay higher wages to attract skilled employees to meet the increasing demand for their goods and services.

There is, however, a danger of overheating within the economy during a boom. This is where businesses, faced with increased demand and an inability to increase output in the short term, take advantage of the excess demand by increasing prices and profits. This eventually results in higher inflation as prices of goods and services increase. The pace of change cannot be met by an ever-decreasing supply of available resources as the economy approaches full employment.

Budgeting and saving

Although a boom period might reduce the demand for There for You’s grants, as employment levels are higher, the services and advice offered will be crucial for many members. Unexpected events can happen to anybody. Even when unemployment is low, many people still look for work or may be on low incomes requiring assistance. Financial planning advice offered by the charity is as relevant in this part of the business cycle as in others as members need to plan to protect their future. For example, members need help with budgeting and saving surplus income.

Fundraising is a vital part of There for You’s business strategy. This helps to support the future of the charity. Fundraising is vital during all stages of the business cycle to create revenue that supports UNISON members. One way the charity does this is through its Octopus lottery. This provides a regular source of income to support the charity’s operating costs. Revenue streams from the lottery tend to be higher in the boom period as there is less financial pressure on members’ incomes.

Downturn and recession

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During a boom it may be difficult for organisations to supply the growing demand for goods and services. This particularly applies to the capital goods industries where increasing demands for equipment result in delays in meeting customer needs. Then as the rate of growth slows down, economic activity slows down, leading to a downturn. Where there are two successive three-month periods of negative economic growth, the economy is in a recession. This causes the size of markets to shrink. People have less to spend and there is pressure for organisations to reduce costs to survive. Within a recession:

  • there is reduced demand for goods and services
  • unemployment increases as jobs are cut
  • people have less disposable income
  • some businesses may be forced to close.

Government spending cuts

The recession in recent years has increased demand for the services that There for You offers. For example, it provides guidance and support, both financial and non-financial, to its members who experience low incomes. This may be due to rising redundancies or a reduction in benefits due to the government’s benefits reforms. Government spending cuts have also seen legal aid and citizen advice services reduced. This has increased the demand on the services that There for You offers UNISON members.

During 2012, There for You provided more than 4,000 grants to its members who needed assistance. Job cuts, reduced hours, pay freezes and reduced benefits put a strain on household budgets and finances. This was made worse by soaring fuel and food costs with many UNISON members finding it difficult to put food on the table, let alone pay for travel to work. In 2012 UK disposable incomes fell to a 9-year low. Support payments to members increased by 45% as many members simply ‘ran out of money’.

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There for You offers small grants to support low income families to provide children with school uniforms at the start of a school year and to help with household bills. With winter fuel costs rising by as much as 388% on the previous year, There for You’s small grants programme supported countless vulnerable individuals and families. Normally the government would increase its spending during a recession, to stimulate demand in the economy. However, its commitment to ‘austerity’, with cuts rather than increases in spending and benefits, have meant that the demand for There for You’s services have been greater than ever before.


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A recovery follows a recession. A number of factors may drive recovery, including government intervention in the economy by reducing taxes or increasing spending. It is a time when the economy becomes stronger and consumer and business confidence increases. This creates an upturn in the business cycle. It means the production of more goods and services as consumers start to spend more freely.

Often the recovery phase can be slow at first as consumers and businesses, still smarting from the effects of a downturn, tend to be more cautious in their spending. However, as the recovery develops, unemployment levels start to fall as businesses invest and recruit to meet increasing demand.

Confidence in the market place

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It can take an economy a long time to recover from a recession. If there is not enough confidence in the market place, it is possible for an economy to slip back into recession. This has been the case for the UK, which has suffered from a double-dip recession. High consumer spending using credit (borrowed money) was a key factor in the double-dip recession. There for You provides leaflets with financial advice and information regarding sources of additional support and the perils of using credit to finance spending in the recovery phase.

The key to sustaining a recovery is using preventative measures to stop another recession. During 2012, There for You developed a winter fuel grants programme combined with financial assistance and a guide to help with fuel costs. Every enquirer who applied for financial assistance received this guide. In 2013, its support included:

  • the launch of an on-line benefits checker
  • the There for You Credit Union Service
  • money management materials.

There for You aims to continuously improve its service for UNISON members throughout all of the phases of the business cycle. As with any significant business organisation, it has set a range of key performance indicators (KPIs) to ensure continuous improvement of the services it offers.


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Recently the performance of the UK economy has created many challenges for UNISON members. Setting up the charity There for You enabled UNISON to undertake its wider responsibilities to its members in difficult times. In doing so, it has provided significant levels of support for members who have struggled with increasing costs of living and the impact of government cuts to benefits and public sector jobs as well as pay freezes. Having an understanding of the phases of the business cycle has enabled UNISON to manage its support services by adapting to changing economic events.

A significant lesson for all businesses to learn from UNISON is the need to not only put strategies together for growth or a downturn in the economy, but also to put in positive action to help with budgeting and saving when the economy is growing. Its strategies, including the commitment to continual improvement, have ensured that There for You has maintained and increased its efficiency in supporting UNISON members through all phases of the business cycle.