Michelle Wright: How will charities and social enterprises fare under the new government?

Further cuts might so austere that any response involving partnershp with the charity and social enterprise sector will be too difficult to implement, writes our guest blogger

Michelle Wright
Michelle Wright

After the general election last week, it’s time to regroup. What might we expect from a majority Conservative Government that is pledging to implement its manifesto in full?

Rumours of £12bn in unspecific welfare cuts raise fears across the charity sector about short-term policies that might target the most vulnerable and, because of the speed of their implementation, have unintended consequences. For example, the plans to remove housing benefit from under-21s on Jobseeker’s Allowance are bound to bring increased demand on homelessness support.

Similarly, all eyes will be on the upcoming budget and spending review aimed at reducing the deficit. With health spending protected and an additional £8bn ring-fenced for the NHS by 2020, this is likely to mean deeper in-year cuts in other, unprotected departments. Initial plans imply cuts of more than 5% in 2016-17 and 2017-18 – twice that of any of the last five years.

There are, however, good pledges on employment, including three million new apprentice places and the removal of income tax from anyone on the minimum wage working 30 hours or less a week. And the pledge not to increase in income tax, national insurance or VAT rates for the next five years will be welcomed across all sectors.

It was certainly a surprise to see reference to the seemingly defunct big society in the Conservative manifesto. However, elements of this policy still abound. The government will increase support for volunteering through the National Citizen Service, with a free place for every 16-17 year old, and for the Prince of Wales’ Step Up to Serve volunteering charity. But from my perspective, it is difficult to really feel the impact of these initiatives, and it’s therefore disappointing not to see a re-model or response to the learning from previous activity. Surely job creation is a more immediate priority?

It will also be fascinating to see if the new policy to encourage a workplace entitlement of three days of volunteering leave takes hold. Surely this goes against the grain of of volunteering – that it is about the free will of the individual to get involved with a charitable cause?

One area with real potential to flare up area is housing. If, as proposed, housing associations will have to offer their tenants the right to buy, it will make it difficult for associations to continue their role as the main provider of affordable housing for vulnerable people. According to current law, charities shouldn’t dispose of assets for less than their full value. So if tenants can dispose of these assets, housing associations may run into difficulties as social housing providers.

This is a really complex area and I think will lead to huge opposition. A watching brief is relevant here as, in my opinion, if there is one area where the charity sector will vociferously oppose a policy, this will be it.

So it is a mixed outlook for the charity and social enterprise sector, ranging from planned spending cuts, which will undoubtedly affect the most vulnerable, to some ring-fencing of valued arts and sport activity. The crux, as with all areas of the manifesto, lies in the forthcoming budget and spending review. There is a very real danger that further cuts will be so austere that any response involving partnershp with the charity and social enterprise sector will be too difficult to implement.

For me, the creativity of the charity and social enterprise sector could be a critical factor in delivering many aspects of this manifesto, but if that is to happen the sector must be treated as a true partner, with associated support for unleashing innovation at all levels. We’ll wait and see…

Michelle Wright is chief executive and founder of Cause4, a social enterprise that support charities, social enterprises and philanthropists

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