Editorial: Political Budget offers little to the sector

The most encouraging thing for the voluntary sector in last week's Budget was the £80m fund for grants to small community organisations, writes Third Sector editor, Stephen Cook.

It's not large - only £20m a year for four years - but it's a welcome sign that the Government is listening to the argument that grants remain a source of income without which some organisations, vital to the fabric of local communities, will go to the wall. Loans and contracts are not good or even possible for everyone, and it's welcome to see some tangible recognition of that.

That said, the Budget, like the decision on the funding of the 2012 London Olympics, offers pretty slim pickings to the voluntary sector. Ed Miliband has made a convincing start on the previously neglected task of making Whitehall third-sector friendly, as our feature on page 18 demonstrates. But there are, inevitably, some political decisions for which higher imperatives take over. It's clear that a key part of Gordon Brown's strategy to win first the Labour leadership and then a General Election is the introduction of a tax cut that favours middle earners and occupies what little remains of Conservative territory before David Cameron can get there. So imagine the response if Ed had tapped Gordon's elbow and said: "Sorry, Chancellor, you can't do that - my lot will lose some Gift Aid." It might not have gone down too well.

An attempt to compensate for the Gift Aid consequences of the 2p cut in the basic rate of tax is the undertaking to "work with the sector to increase awareness and take-up of Gift Aid". This was announced by the Government with a canny reminder that the Charities Aid Foundation, which believes there will be a loss to the sector of as much as £71m, has also estimated that £700m more could potentially be claimed by the sector. The danger is that this offer is only window-dressing: the Treasury and HM Revenue & Customs always drive a hard bargain on the framing and application of regulations for the claiming of Gift Aid. The sector's representative bodies should make sure that something really does happen as a result of this pledge, and make a fuss if it doesn't.

Beyond that, there was little to write home about. No wonder that when chief executives body Acevo heard Sir Michael Lyons propose in his review of local government that charities should lose business rate relief, and reported it pronto to the Office of the Third Sector, a statement was rushed out saying this simply wasn't going to happen.

Even so, the Budget was a bit of a disappointment, no matter how hard you spin it. But then Brown had a wider audience in mind than the voluntary sector.

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