…and five things I wish the chancellor had said

We have a long-term plan for charities and the tax system

There was much to be positive about in today’s budget for any number of charities that were targeted with injections of capital investment or VAT relief. These were unalloyed good measures for those concerned. Yet I can’t but think that these make for good politics, less so good policy. On issues like VAT it feels like we need a longer-term vision for how the tax system supports organisations to work together to deliver services, and in doing so helps charities to meet their potential in solving some of the bigger issues facing the next government. Not without risks for the sector, but I wonder if another charities tax review wouldn’t go amiss?

We need to move more quickly to help small charities

We often get feedback from small charities that the odds are stacked against them and that this seems to get more difficult every year. Fundraising training for small charities will help – thank you, chancellor. The small donations scheme should have been the home run here, but so far isn’t. Today’s increase of the limit only takes us to second base. This needs a real look under the bonnet at the complex rules surrounding its use: government has committed to this for 2016, but a greater sense of urgency would give small charities more confidence that they were being heard in government.

Our long-term plans for public spending centre around early intervention

For a chancellor rightly concerned with the long-term, a focus on early intervention should surely be the centrepiece of any budget when it comes to public spending. This is another one where every now and then we see glimpses of what’s possible in terms of government priorities, but the reductions in department expenditure limits, particularly for the local government bit of DCLG, once again outlined the transformation required in service delivery if we are to meet increased expectations and demand. There is much more to be done here.

We want to transform public service commissioning

If early intervention is about reducing the demand side of the equation, then better commissioning is about the supply side. We get feedback here at NCVO on a regular basis that public service commissioning isn’t working for anyone but the biggest commercial outfits – creating the too big to fail scenario in some areas. Indeed, the recent announcement that Serco was writing off £1.5bn on their public sector contracts suggests it’s not even working for them. I wish the chancellor would ask whether this is value for money for taxpayers and what a different system could look like.

We want to continue building on the philanthropy of local communities

Local authorities across the land have been dealing with what some have termed the localisation of spending cuts, a challenge handed on to the voluntary sector in numerous cases – just look at Liverpool last week. Philanthropy can make up some of the difference, especially with a push from government in terms of match funding. So I wish the chancellor had built on one his major successes, the endowment match challenge, to encourage more local giving.

What do you wish the chancellor had said? Comment here or tweet @ncvo

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Karl Wilding Karl Wilding, Director of Public Policy and Volunteering, leads NCVO's volunteering, policy, research and campaigning work in the UK and internationally. With lead responsibility for shaping the external environment for the voluntary sector, he blogs about the big issues facing voluntary organisations.

20 Responses to …and five things I wish the chancellor had said

  1. Polly Harrar says:

    Karl
    Thank you for this post and highlighting what most of us are already thinking.
    You made a really interesting point about preference given to large charities as they are seen to be ‘too big to fail’ – we would love to see small charities being given recognition for our work so we too may benefit from tax support systems
    Also, whilst some fundraising training is offered to smaller charities, when it comes to Government funds, the offer for free training is often followed by complete silence.
    Finally, what I would like to see is how the budget calculates the deficit in service provision for women and children’s services, which is at an all time low against what is actually available in the pot – I suspect, this does not add up to a positive figure.
    Thanks again

    • Karl Wilding Karl Wilding says:

      Hi Polly
      To be honest, I was more thinking the big commercial outsourcing companies on the too big to fail front, but even some of these are losing money on government contracts. No wonder therefore many voluntary organisations can’t make a go of the commissioning environment.

      On the big vs small charities – it’s something I hear a lot of and something I’m thinking about a fair bit. I’ll stick my neck out here and say that there’s more that unites us than divides us; far better for us to strengthen the collaborations that exist in our sector where public benefit is the golden thread. But it’s clearly not always working, and I think we here at NCVO need to ponder that, especially given we have many large charities in membership, but also thousands of kitchen table charities too.
      Karl

  2. Trevor Randle says:

    To late for many like us small charities, we are closing after 8 years after being turned down for funding due to the economic climate and the funding is being reduced as the replies state.

    • Karl Wilding Karl Wilding says:

      Trevor, I’m really sorry to hear that. We know that local government has been squeezed particularly hard, and that their strategies to cope with this (such as ‘insourcing’) have meant voluntary organisations have been cut disproportionately. I hope that for those left to take up the strain some of the initiatives to boost giving and fundraising will help. If its not too late for you, Funding Central is well worth a look in terms of opportunities.
      Karl

  3. It would have been good to see a way for VAT to be recovered by all charities.
    VAT recovery is impossible for smaller charities and CIO’s.

    And a banking system that makes it easier to change signatories!!

    If Gift Aid is underspent, why not give back more than 25p in the £?
    Simple- but an effective way of spending the money- they could match fund if they wanted to- what an incentive!!

    • Karl Wilding Karl Wilding says:

      Hi Jackie
      We’ve been told for a long time that ‘European rules’ mean that VAT can’t be changed, but the announcements this year and last year highlight that where there’s a political will, there’s a way. The challenge we’ll of course have is one of affordability – I guess the response would be to any future chancellor is can you afford for voluntary organisations not to achieve their potential role in delivering services to the public?

      I’m not an expert on charity bank accounts, but are good friends at Charity Finance Group might have advice for you in terms of which banks are most charity friendly.

      Your final point about Gift Aid isn’t quite achievable because of the intricacies of how charity tax reliefs work. The Chancellor created the ‘Gift Aid Small Donations Scheme’ using a different mechanism from vanilla Gift Aid; and its the small donations scheme that’s not achieving it’s potential…though many argue the same about its big brother. I guess in both cases we want to keep pushing to make it simpler for small charities, while recognising that we need safeguards to ensure the public are confidant that their support isn’t ending up in the wrong hands.

  4. Dear Karl

    Thank you for making the Budget proposals for charities easier to understand. I am pleased that you are continuing to plead on behalf of small charities and matched funding needs to be continued.

  5. Mary says:

    We are squeezed on all sides the bigger organisations have as predicted swept in and are money orientated rather than people! Our charity is small and our social enterprise has 10 staff. However, with mounting payroll costs, NI, pensions, VAT and decreasing funding opportunities our future after 12 years serving our community is tenous.
    Thank you for these comments which often remain hidden they are really helpful.

    • Karl Wilding Karl Wilding says:

      Hello Mary
      Hopefully my reply to Polly above addresses some of your concerns. Probably all I can add is that our members tell us all the time how tough it is these days to run a charity – so I hope that we’re going to help you by continuing to shout out on your behalf to people in government, while giving you practical support to make it easier and cheaper to keep the show on the road.
      Karl

  6. Mark says:

    Hi Karl
    Not sure the moderators would let through what I really wish the chancellor had said but…
    It is good to hear that you are sticking up for the small charities, however how we define small is important. The majority of CCVS members have income of less than £50K and the budget has been another disaster for them. Gift Aid and VAT are not the issue for them, it is the fact that many rely (and you may think they shouldn’t) on small grants from local authorities to survive. As the cuts continue the grants disappear, as the grants disappear the groups close, as the groups close the glue that binds communities together gets a little weaker. I would like to hear NCVO being a great deal more vocal about the impact that the cuts are having and opposing them as a matter of principle. You are in a unique position, you have the ear of government, I believe you have a duty to your members, the wider sector and to communities across the country to say enough is enough.

    • gilbert says:

      mmark
      you right. some of us small charities will die in the rubble…. seems charity is designed for the big charities who are hardly in touch with reality. Corporate world is taking over the concept of charity…and theres nothing grass can do where elephants fight
      gilbert

      • Karl Wilding Karl Wilding says:

        Gilbert
        As I’ve said in a reply above, we’ve got charities large and small who talk to us every day. I see people in the largest and the smallest charities who share an equal passion to make a difference against the odds.

        These are incredibly tough times, and I reckon its more important than ever that we stick together.

    • Karl Wilding Karl Wilding says:

      Hello old friend :-)
      We’ve consistently argued that strong communities need a strong voluntary sector, and for me that’s a mix of big and small charities, community groups and social enterprises. And that means we need a good range of funding options to match all shapes and sizes.

      Clearly that includes grants – and as you’ve probably seen, we’ve been making the case for grants on these pages. I do wonder if there are some glimmers of hope here? I’m hearing of examples such as Police and Crime Commissioners making small grants; lots of ABCD stuff going on to. But not at a scale to replace the long-term decline in grant funding. I do think government’s in the future will come to regret this. So we’ll keep making the case.
      Karl

  7. Carol says:

    I’m not surprised that the Chancellor has gone for good political capital rather than putting in place something more far-sighted. However, in one way I see this as a shot in the arm for smaller charities. This is the time to start looking at other ways to raise funds – keeping away from government control by raising their own running costs by trading, fundraising activities, etc. Those that can master that attitude are still doing pretty well, and have the added bonus that they can spend their proceeds on what they know they need the money for, rather than ticking the funder’s boxes.

    • Karl Wilding Karl Wilding says:

      Good points Carol. I’ve seen good organisations struggle and fold because of the funding environment, but I’ve also seen determination and a desire to do things differently. I think what you’re describing is what I heard called a shift from fundraising to resource raising. Hopefully NCVO members can share these ideas and experiences a bit more with each other.
      Karl

  8. Robert Groom says:

    This chancellor seems to think that central government can go on loading the burden of what are manifestly desperately needed services onto the shoulder of volunteers, of which he thinks are is a limitless supply. With the best will in the world volunteers cannot indefinitely self finance their activities, he needs to recognise this. He could begin show some sign that he lives in the real world by simplifying the ludicrously labyrinthine documentation that charities have to complete on a regular basis, thus leaving us more time to do the things which matter to those in need. Robert

    • Karl Wilding Karl Wilding says:

      Robert, my colleague Justin Davis Smith has been championing the case for volunteering, with a clear message that it doesn’t come for free. We’ll continue to argue that volunteering can make a bigger contribution, but volunteers, and volunteer managers, need support.

      On the issue of bureaucracy, more than happy if you wish to drop us a line. Ministers are keen to hear about red tape and have already tried to hack away at some of this, but if there’s anything you have in mind we can take a look.
      Karl

  9. Jim says:

    I too hope the smaller charities get tax support. Lets not forget the small guys.

    Jim

  10. Paul Gloster says:

    I think its great that George has made charitable contributions on our behalf, it saves me deciding where to put my money.