Sir Stephen Bubb says absence of local sustainability fund from Budget is 'major failure'

Bubb is one of a number of sector leaders to question why the £40m fund, first announced more than a year ago to support medium-sized voluntary sector organisations, was not announced

Sir Stephen Bubb
Sir Stephen Bubb

Sir Stephen Bubb, head of the charity chief executives body Acevo, has said that the lack of an announcement in today’s Budget about the government’s long-awaited £40m local sustainability fund is a major failure for the Office for Civil Society and a "sign of a government that no longer cares about the effects of the cuts on local communities".

He was among the sector leaders to question why Chancellor George Osborne’s Budget made no mention of a £40m fund to support medium-sized voluntary sector organisations first announced more than a year ago.

Although the sector welcomed some announcements in today’s Budget, including an expansion of the Gift Aid Small Donations Scheme, the new charity authorised investment funds, money for fundraising training and grants for various charities, the absence of an announcement on the expected local sustainability fund has been questioned.

In an interview with Third Sector in March last year, Nick Hurd, then the Minister for Civil Society, said the Cabinet Office would consult on a new fund, expected to be worth £40m, which would support service-delivering voluntary organisations that were in danger of closing because of financial pressures.

The department opened a consultation on the fund’s design in May last year and said the details would be finalised during the summer.

The Cabinet Office said last month that it hoped HM Treasury would approve the scheme and have it opened for applications before the end of the financial year on 31 March. But a spokeswoman for the Treasury told Third Sector last week that she could not provide any update. It was hoped that the scheme would be announced formally today.

Sir Stephen Bubb, chief executive of the charity leaders group Acevo, said today: "The failure to announce this fund to help local charities is a major failure for the Office for Civil Society and its leadership. It is a sign of a government that no longer cares or wants to speak about the effect its cuts have had on our local communities. We were disappointed at how long the Treasury sat on this decision, and that the many hours the sector spent with officials crafting the fund have been ignored."

Neil Cleeveley, chief executive of local infrastructure body Navca, said: "I am shocked that there’s no mention of the long-promised local sustainability fund. Successive ministers have promised it, so we have to know whether it’s been ditched or has just got stuck in the system."

A spokesman for the Cabinet Office said that it was still working on the fund and the department had not intended to include it in today’s Budget announcements. He said that nothing had changed on the fund in the past couple of days.

Responding to the announcement about how fines raised from banks for manipulating interest rates would be spent, Cleeveley said: "It’s good that Libor fines are being used to help some terrific charities. However, I feel uneasy that a government decides what charity they want to help instead of having an open fund for all charities."

Bubb also welcomed the broader announcements, but said: "They do not make up for the Budget’s failure to deliver for our communities. The government does not wish to speak about the continued decimation of local services owing to swingeing cuts, and refuses to take steps to do anything about it."

John Hemming, chair of the Charity Tax Group, said: "Overall, this is a positive Budget for charities, and I’m particularly pleased that there will be a further VAT refund scheme for another part of the charity sector."

Hemming said the CTG understood that government would create an exclusion for charities from the diverted profits tax, a new law designed to tackle contrived arrangements by multinational companies to avoid paying tax in the UK.

He said the CTG expected full details to be included in the Finance Bill, due to be published next week. Hemming said: "If a charity exclusion had not been built-in, the use by charities of trading subsidiaries would no longer have been an option."

John Low, chief executive of the Charities Aid Foundation, said: "The charity sector was not going to loom large in this pre-election Budget, but the initiatives are indeed welcome." He said that the introduction of the new investment funds was "a very positive step" and called announcements about VAT "a chink of light for the sector as a whole".

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