Autumn Statement 2014: Help the sector to make a bigger difference

On the 3rd December the Chancellor of the Exchequer will stand before the House of Commons to deliver his last Autumn Statement before the General Election in 2015.

While the upcoming election will dominate the government’s thinking, it is also an opportunity for the Chancellor to use his last ‘fiscal event’ (as it is known in the jargon) to support the work of the voluntary organisations and volunteers.

As part of the government’s consultation process, NCVO coordinated a Letter to the Financial Secretary to the Treasury (PDF, 216KB) on behalf of the voluntary sector. It brought to together NCVO, Social Enterprise UK, Charity Finance Group, NAVCA, Institute on Fundraising,  Association of Charitable Foundations, Big Society Capital, Locality, Small Charities Coalition, Compact Voice and Charities Aid Foundation.

The letter laid out some of the barriers that we believe the government should remove to help the voluntary sector make a bigger difference. Here is a quick overview of its contents.

1. Public service reform

Voluntary organisations play a big role in the delivery of public services but worryingly, as reported in the NCVO Almanac earlier this year, income from contracts and grants has fallen. While the voluntary sector cannot be immune to cuts in public spending, we believe that there are other factors preventing voluntary organisations from winning contracts.

We recommend that the government invests more in training of commissioners, through expanding the Commissioning Academy and building the capacity of the sector through, for example, providing more resources for the OCS Masterclass programmme. We also urge the government to support smaller organisations by monitoring the implementation of new EU rules that enable commissioners to break up contracts into smaller ‘lots’ that should encourage smaller (and more local) delivery.

We also want the government to put resources into the proper implementation of the Public Services (Social Value) Act through the creation of a Centre for Social Value to provide practical help to commissioners and providers, and through a Social Value Unit in HM Treasury so social value is rigorously measured and increased across all aspects of public spending.

The government should also monitor the effect of cuts on grants and ensure that value for money grant programmes are not lost. Grants are vital for ensuring a range of organisations can deliver public services and can be better value for money than contracts.

Finally, we believe that the government has to put more resources into preventative spending and should encourage all commissioners to focus on early action and develop partnerships with the voluntary sector and social enterprises to create effective interventions; building on the Community Budgets programme and principles embedded in local Compacts.

2. Encouraging philanthropy

Increasing giving is essential if the voluntary sector is to be able to meet growing demand. The government should use the Autumn Statement to communicate its commitment to maintaining a supportive framework of tax reliefs over the long term.

We also recommend that the government should fund a new promotional campaign for Gift Aid to raise awareness, and review the Gift Aid Small Donations Scheme, to ensure that it is helping as many small charities as possible.

There is an opportunity to promote philanthropy at a local level, and we urge the government to expand and extend the Endowment Match Challenge so that additional endowments made to community-focused foundations are encouraged through match funding.

3. Promoting a sustainable sector

We welcome the £40m that has been announced for the Local Sustainability Fund, however, we are concerned that this fund will only be in operation for one year.

We believe that this will limit the effectiveness of the fund and recommend that the fund’s lifespan should be extended to three years. The data from this fund will also be useful for other funders, including for example charitable foundations, as they develop their programmes to support voluntary organisations and we urge the government to share data gathered through the fund with the sector.

 4. Improving access to social investment

There needs to be greater focus on the capacity needs of voluntary organisations and social enterprises and help for them to become investment ready. Charities and social enterprises need support to develop sound business models and financial skills if social investment is to fulfil its potential in delivering social change.  The government should extend the Investment and Contract Readiness Fund to provide this support.

We also believe that social investment can provide finance to support voluntary organisations and social enterprises bidding for public services. We urge the government to recognise the differences between sector service providers and social investors on the one hand, and large-scale private-sector ‘parent companies’ on the other hand, when government seeks to secure large financial guarantees for public service contracts.

The Social Investment Tax Relief provides an opportunity to diversify the social investment market, however we believe that the threshold for how much charities can raise through the relief is too small and urge the government to significantly increase the investee limit to £5m, on par with the Enterprise Investment Scheme.

The government should also consider how to support the growth of community shares, which have helped many voluntary organisations and social enterprises access capital and support community engagement.

Making a bigger difference

Charities employ over 800,000 people and support over 20m people to volunteer across the UK every year. The voluntary sector’s gross value added to the UK economy is nearly £12bn and we estimate the economic value of UK volunteering at over £23bn. The Government’s own figures suggest that social enterprises turnover £163bn a year and contribute £55bn to the economy in gross value added.

The upcoming Autumn Statement is a chance for the government to support the voluntary sector make a bigger difference in improving our society and our economy, and hopefully, ministers will take on board some of the recommendations we have made.

What do you think? Are there other things that government could do to support the work of the voluntary sector? Leave a comment below.

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Andrew was NCVO’s senior policy officer. He covered issues around funding, social investment, tax and the impact of the economy on the voluntary sector. Andrew has left NCVO, but his posts are kept here for reference purposes.

3 Responses to Autumn Statement 2014: Help the sector to make a bigger difference

  1. Good ideas all round.

    Would flag on the “breaking contracts into smaller lots” issue mentioned in point 1 that there is an existing community right to challenge – part of the localism bill, that can be used to encourage local authorities to do this. However I have yet to hear of this being used by our sector on any meaningful scale…

    On a separate point, is it just me that sees an irony in a sustainability fund only being for one year!

    Best, N

  2. Brian Craven says:

    The single greatest step the Chancellor could take is to finally introduce Gift Aid support for Volunteer Time. The system at present encourages people to give money but not to get directly involved. Many – perhaps most – local charities cannot afford to pay expenses out of revenue. So volunteers actually pay for transport and other costs in order give their time. Many do this gladly, but more would volunteer and more would volunteer more often if the charity could show the cash benefit derived from their time donation.
    Stop funding short term measures which often focus on the VolCom second tier. Start funding direct delivery, at grassroots, in frontline services.

  3. Mags Mercer says:

    I input to a Consultation in July regarding the sustainability fund so good to see the content. My question is how can small charities (like ours) access the sustainability fund and what is the selection/qualification criteria going to be?
    thanks.