Liam Byrne, the shadow minister for the Cabinet Office, has accused the government of "driving a steamroller over the big society" in the spending review announcements yesterday.
Byrne said charities would be hit hard by cuts to local authorities and said the £100m Transition Fund, which will help charities in England facing financial difficulties, would not come close to providing what the sector needed, given the impending VAT rise from 17.5 to 20 per cent in January.
"The huge scale of cuts to local councils will hit charities hard, because it’s where most of their government support comes from," said Byrne.
"The transitional relief announced for struggling charities won’t come close to meeting the new £170m VAT bill charities have to pay and can’t reclaim. And worse, both Tories and Liberals have voted against a Labour measure to protect charities from the VAT hike."
Byrne claimed that the Cabinet Office was unable to explain what contracts Whitehall had in place with voluntary sector organisations. "So it’s no surprise they’ve fallen so short protecting charities from Osborne’s axe," he said.