Spring Budget 2021

Last week the chancellor delivered his spring budget. Since March 2020 more than 700,000 people have lost their jobs while the economy shrunk by 10% last year. The government’s plans had a strong focus on supporting business and addressing unemployment.

Once again, there was a great deal of spending set out in the chancellor’s announcement, but disappointingly, little in the way of specific support for the sector, despite the prime minister’s pledge to do ‘much more’ to support the voluntary sector over the winter.

As part of the #RightNow campaign, NCVO along with 100s of other charities wrote an open letter to the prime minister urging the government to create an emergency support fund to help charities that are experiencing rising demand as reserves are diminishing.

Through a ‘Five Point Plan’ jointly developed with other infrastructure bodies we also called for the introduction of a gift aid emergency relief package; the use of stranded assets to support charity services; more progress on the effective and efficient distribution of the UK Shared Prosperity Fund; and more funding for councils.

While our calls for sector-specific support went unanswered, there were several other announcements that were of interest to charities.

Announcements of interest to charities

  • The furlough scheme – which has provided a vital lifeline for many charities – is being extended until September 2021. Cuts to VAT for hospitality businesses (including eligible charities) will also continue
  • High street shops and hospitality firms will be able to get a ‘restart’ grant from a £5bn fund to help them reopen after lockdown. Grants will be worth up to £18,000. Charities that satisfy the necessary criteria are expected to be eligible for support an increase in business grants allowances, unlocking up to £1m of extra funding (and possibly a further £9m) for charities with large retail, hospitality, or leisure property portfolios):

  • An extra £300m will be added to the government’s £1.57bn Culture Recovery Fund. Museums and cultural bodies in England will also receive £90m until they’re able to reopen. There will also be £18.8m for community cultural projects.
  • The chancellor announced £19m for domestic abuse programmes; £10m to support veterans with mental health needs and a £40m down payment for victims of the Thalidomide scandal with a guarantee for future funding.
  • Community groups will be able to bid for up to £250,000 of matched funding to buy local assets, or £1m for a community-owned sports club or ground through the £150m Community Ownership Scheme.
  • The current £20 uplift in universal credit will stay in place until September, though many will question why this isn’t permanent given the fragile state of household incomes. The National Living Wage will also rise to £8.91 from April 2021.

  • There will be a £220m UK Community Renewal Fund to provide funding for projects investing in people, communities and businesses in local areas. This relates to the pilots for the long-awaited UK Shared Prosperity Fund. 
  • Social Investment Tax Relied (SITR), which offers tax relief to individuals to encourage them to invest in social enterprises is being extended for two-years. 

  • More details on the ‘Levelling Up Fundfirst announced at last year’s Spending Review were also announced. Community spaces are among the examples given of what could be bid for under cultural assets (as well as things you’d expect like museums, arts venues, theatres etc). NCVO’s Chris Walker has provided a detailed thread summary of the fund. 

Where next?

Big spending aside, many in the sector have been left scratching their heads about why the government has failed to fully recognise the impact the pandemic has had on the sector – both in terms of reduced funding and increased demand – and the significant contribution charities make to local economies. As we approach the Spending Review later this year, NCVO will continue to impress upon the government the importance of supporting social infrastructure and the vital role this will play in the country’s post-pandemic recovery.

To help us do this, we are currently conducting the largest UK study exploring the impact of covid-19 on the sector. The latest round to the survey is now open until 22 March 2021. The more organisations that complete this the more impact it has. It is quick, easy and only takes a few minutes to complete. As a small thank you to everyone who takes part, there is a chance for participants to win £200, and a £2000 prize draw at the end of the project (see here for further information on the prize draw).

 

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Paul joined NCVO over seven years ago after working for a leading public affairs agency. Since then he’s led our policy work on a variety of issues, including welfare-to-work reforms, volunteering, the Compact, public service commissioning and procurement regulations. He now leads our work on funding and finance with a particular focus on charity tax relief and safeguarding EU funding post-Brexit.

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