The Budget: verdict from the sector

A welcome for £20m hardship fund, but disappointment at lack of progress on setting up a social investment bank and Gift Aid reform

Alistair Darling, Chancellor of the Exchequer
Alistair Darling, Chancellor of the Exchequer

Voluntary sector leaders greeted Alistair Darling's 2009 Budget with a mixture of enthusiasm and frustration. The biggest hit was a new £20m grant fund for charities hit by the recession, which came as a welcome supplement to the £42.5m action plan announced in February.

They also welcomed an additional £18.75m to help credit unions make more affordable loans to people on low incomes, and a match funding scheme to help create 150,000 new jobs for young unemployed people, which they said would draw young people into the sector.

John Low, chief exective of the Charities Aid Foundation, said the Chancellor had brought some welcome good news: "Coming in an extraordinary budget when nobody expected much help, this demonstrates recognition right at the heart of government that charities are the front line support for many people during these difficult times."

The frustration came over Darling's failure to announce promised measures to streamline Gift Aid and reform the problematic substantial donor legislation, and the Government's slow progress on the commitment to set up a new social investment bank. Hopes of measures to ease charities' problems with VAT and prolong the staff hire concession, which helps charities that use agency staff, were also disappointed.

The Charity Tax Group issued a statement saying the sector was "invisible" in the Budget. Helen Donoghue, director of the group, said: "It is surprising that a number of measures that could have been introduced to ensure the sector played its part in delivering services to alleviate the social problems caused by rising unemployment were overlooked."

Shadow charities minister Nick Hurd said the decision to hold a consultation on a social investment bank, rather than making a firm commitment to fund it, was a "missed opportunity".

"The Government policy of 'wait and see' raises some real questions that highlight the Government's regrettable tokenism towards the sector," he said.

"Why has the Government stalled yet again on the social investment bank? The Government needs to come clean on its intentions for it. If they are genuinely serious about it, we need a real timetable with solid milestones for its delivery."

Opinion was divided on whether the new 50 per cent tax rate from next year on incomes above £150,000 would harm or boost donations to charity. Some felt high earners would give less; others that they would be attracted by being able to claim back a higher percentage of a donation for themselves.

Click here to go to our Big Issue on the Budget, which has detailed stories on how the sector will be affected.

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