Funding cuts and VAT rise will cost voluntary sector £734m, says Labour

Government's austerity programme "damages community organisations' ability to deliver"

The government’s programme of funding cuts and proposal to raise VAT will cost voluntary sector and civil society organisations £734m, according to figures from the Labour Party.

The cuts include:

  • £340m from the cancellation of the Future Jobs Funds;
  • £50m from the Working Neighbourhoods Fund, which helps people from deprived areas back into work;
  • £11m from the Youth Sector Development Fund, which works with disadvantaged youngsters; and
  • £95m from the National Affordable Housing programme.

The figure also includes costs of £143m in irrecoverable VAT for the sector under the proposed increase of VAT to 20 per cent.

Labour said the cuts represented 6 per cent of the £12.8bn that the National Council for Vountary Organisations estimates voluntary organisations received from statutory sources in 2007/08.

Tessa Jowell, shadow minister for the Cabinet Office, said: "At the very moment that expectations are being raised, government action is damaging the ability of community organisations to deliver.

"With further spending cuts on the way, it is highly unlikely that civil society will become ‘bigger’ over the coming months and years."

A spokesman for the Cabinet Office said: "Reducing the deficit is critical for the future of every part of our society. As with all sectors, the civil society will be affected by necessary reductions in spending."

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