Osborne produces a mixed bag for charities

Commentators say the Chancellor's measures have 'smoothed the profile of the cuts' but are 'sector-agnostic'

A large increase in places on the National Citizen Service, extra funds for social impact bonds and a promise not to raid the Big Lottery Fund were among the announcements affecting the voluntary sector in today’s joint spending review and autumn statement.

In his speech to parliament today, George Osborne, the Chancellor of the Exchequer, said the government would increase places offered on the NCS scheme for 16 and 17-year-olds from 80,000 to 300,000 a year by 2019/20.

He promised that the government would increase funds to the Arts Council, national museums and galleries - without raiding cash earmarked for the Big Lottery Fund "as some feared".

A group called Save Big Lottery had raised concerns that the Treasury was planning to take £320m a year from the Big Lottery Fund to make up for cuts to heritage, arts and culture.

>>At a glance: The main points from the spending review

Documents released alongside the speech showed that the government would offer £105m over the remainder of this parliament to support social impact bonds.

They also showed that the Charity Commission’s budget would be frozen at £20.3m a year until 2019/20, which the National Council for Voluntary Organisations calculated would be equivalent to an 8.5 per cent cut in real terms over the next five years, based on the government’s growth estimates.

The Chancellor also announced an extra £15m a year of funding for women’s support charities, taken from the so-called "tampon tax", in lieu of being able to change the tax rate on women’s sanitary products.

He said that local authorities would be allowed to keep the receipts from business rates, but made no announcement on the safeguarding or otherwise of the 80 per cent mandatory relief that charities currently receive.

The full results of the government’s ongoing review of business rates will now not be known until the Budget next spring, the Chancellor said.

The spending documents showed that the government will publish in December a call for evidence to inform its review of the Gift Aid Small Donations Scheme, which was first announced in last year’s Budget.

They showed that the government will give £25m over the next three years from fines levied on banks to support a range of military charities and other good causes, including £4.7m for Veterans With Dogs and up to £1.5m for the Great Ormond Street Charity.

The Treasury also announced an exemption for charities so they are not required to pay a tax on loans or advances made by close companies to charity trustees for charitable purposes.

Osborne announced that the extension of the right to buy to include the tenants of housing associations - a Conservative election pledge - would begin with a pilot involving five social landlords from midnight tonight.

>>At a glance: The main points from the spending review

Karl Wilding, NCVO director of public policy, said that the announcements demonstrated the government was "agnostic" over the voluntary sector.

"I think we have a government that appears quite sector-agnostic," he said. "If you look at the big spending announcements, the expansion of the NCS and the funds for social impact bonds, these are platform-neutral announcements – in other words they are independent of the sector in which they take place."

Caron Bradshaw, chief executive of the Charity Finance Group, said: "This spending review has not changed the fundamentals for charities, with significant cuts still coming down the line. But we welcome the Chancellor’s decision to smooth the profile of the cuts to give charities more time to adapt their budgets."

She called for more clarity on the future of business-rate relief for charities and said the government should move away from targeted giveaways, such as the funds announced for women’s charities, and provide wider support for the voluntary sector.

"Funding should be directed in way that builds up the financial capacity of the whole sector, not just a portion of it," she said.

Neil Cleeveley, chief executive of local infrastructure body Navca, said: "The spending review announcement is a welcome easing back on austerity but not an end to it. What would improve things most for charities would be a complete rethinking of austerity so re-balancing the budget is done more fairly with a greater burden on those who can afford to help most."

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