Editorial: Some concessions for the sector, but what about the bigger picture?

There were some useful measures in the the Autumn Statement, but the wider issues are ominous for the sector, writes Stephen Cook

Stephen Cook
Stephen Cook

The Chancellor’s Autumn Statement contained some useful measures for charities and the voluntary sector, starting with VAT refunds for hospices and for search and rescue and air ambulance charities. It has always been unfair that hospices, which arguably ought to be funded by the NHS, have carried VAT burdens that the NHS does not, and the concession will make them an estimated £4m a year better off.

The search and rescue and air ambulance services say they will save £10m over the next five years. As a bonus, air ambulance services in the south west and the south east will also receive money for new helicopters from the fines levied on banks that rigged the inter-bank lending rate, which will strike many as a kind of indirect social justice.

Another welcome move was the extension of social investment tax relief, subject to EU approval, so that sector organisations can receive up to £5m a year, and up to £15m over their lifetimes, from investors who can set 30 per cent of that investment – up to £1m – against their tax liabilities.

This is a substantial increase from the previous limit of less than £300,000 over a three-year period and should help draw more individuals into social investment. Big Society Capital said the previous limit was the single biggest impediment to increased social investment and called the Chancellor’s move a "big boost".

Another concession is that humanitarian workers will, like members of the armed forces, be spared inheritance tax if they die in service. And the government will take forward plans to improve Gift Aid and facilitate indirect investment in social enterprise through third-party schemes.

The backdrop to the statement, however, is the continuing struggle to reduce the country’s deficit, which the government predicted five years ago would be eliminated by the end of this parliament. Expert commentators have been making frightening predictions about of the scale of the spending cuts the next government, whatever its stripe, is likely to have to make. Welfare spending is one of the main targets of the Conservatives in particular, and the sector knows well that cuts in that area will throw a bigger burden on charities.

In that context, the measures in the statement feel limited and piecemeal. Momentous things will be happening in politics and the economy in the coming months, and it feels as if the sector is being treated as something of an afterthought, despite its vital contribution to the wellbeing of society in times of stress.

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