Autumn Statement: Key Points for Voluntary Organisations

NCVO has issued our response to the Autumn Statement today, saying that it was a sobering assessment of the nation’s finances that offers little comfort for vulnerable people and the charities that support them.

Taking a look in more detail at key points for the sector:

– Austerity set to continue; growth measures limited in scale

With the Chancellor still in pursuit of his fiscal targets, he confirmed that austerity will last well into the next parliament.

While announcing new investment in infrastructure projects and also giving go-ahead for the new Business Bank, these measures are unlikely to give a significant boost to growth. Indeed, the Office for Budget Responsibility has cut its growth projections for the years ahead – down to 1.2% in 2013, 2% in 2014.

– Further cuts & new spending review

The Chancellor announced that Departmental budgets will be cut by an additional 1% next year and 2% in following years – on top of cuts already planned. See detailed analysis of the total departmental spending cuts by the Institute for Fiscal Studies.

A potential further cut to local government budgets from 2014 has garnered a strong reaction from the LGA, noting that “local government is one of the few parts of the public sector which actively promotes economic growth”.

Looking ahead, the Government will launch a new spending review in 2013 to set spending priorities for 2015 and beyond.

NCVO and many of our members will have an interest in this spending review, which will not only fill in the details of Government spending towards the end of this parliament, but also set the tone for Conservative policies heading into the next election.

– Benefit cuts

By far the most relevant announcement for the sector, the Chancellor announced that most working-age benefits will rise only 1% for the next three years.

This will likely amount to a significant real-terms cut in benefits that will impact on many people’s lives, including those who are struggling but in work. The changes will include local housing allowances, from April 2014.

These changes will greatly increase pressure on vulnerable people in our society and the charities that support them.

– Tax changes

In a crowd-pleasing gesture, the Chancellor scrapped the planned 3p increase in fuel duty.  This widely anticipated move will be welcome by voluntary organisations looking to keep their transport costs as low as possible.

Community Interest Companies will benefit from cut in corporation tax rate from 24% to 21% in 2014, instead of 22% as previously announced in the budget.

– Digital giving

Treasury will review Gift Aid administration to see whether it could better ‘reflect new ways of giving to charity’.

This is welcome news for the sector, as Gift Aid needs to keep step with new technologies, such as NFC payments. See our ICT foresight report for more on these developments.

– Notable by absence

Tax reliefs for social enterprise or social investment – as above, we expect any new announcements to be made in Budget 2013.

Business rates – while extending small business relief, there was no announcement to forestall rises in business rates more widely.

CRB checks – so far no news on free CRB checks for volunteers.

Join our discussion on the Autumn Statement on Twitter #volsecbudget or let us know your thoughts below

NCVO Policy Team’s blog

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Charlotte Ravenscroft was NCVO’s head of policy and public services. Charlotte’s wrote about funding, public service delivery, and strengthening the evidence base for voluntary action. She has also worked at The National Lottery Community Fund and the Department for Education.

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