2017 BUDGET - OUR TAKE ON WHAT IT MEANS FOR CHARITIES

8 March 2017

The Chancellor today delivered his first Budget, updating the country on the Government’s economic forecasts and setting out fiscal policies for the year ahead. Philip Hammond began by outlining the latest forecasts from the Office for Budget Responsibility, which show that economic growth is set to continue throughout the Brexit process, although at a slower pace, and employment, inflation and deficit levels remaining within acceptable levels to the Government.

The top stories to come out of the Budget include changes to National Insurance contributions paid by self-employed workers, increased funding for social care and new schools, and the introduction of new ‘T-Levels’ designed to put academic and technical education onto a more equal footing.
For charities, this was a quiet Budget, without the kind of high-profile measures – good or bad – that have characterised previous economic statements. Here are some of the top things to know:

• The Tampon Tax Fund will provide another £12 million for women’s charities, including those tackling violence against women and girls. This welcome funding, in fact, was the only explicit mention of charities in either the Chancellor’s statement or the Budget red book. In addition, the Government is making £20 million available to organisations working to combat domestic violence and abuse, and to support victims.

• In wake of a growing revolt from backbenchers about business rates, the Chancellor announced action to try and prevent organisations from being hit too hard by the re-evaluation. Businesses losing rate relief will see their increase capped to a maximum of £600, with English councils receiving £300 million of discretionary relief to use locally, that will be available to charities. How this funding will be distributed is set to be revealed in the coming weeks.

• An extra £2 billion will be made available to councils over the next three years for social care, with the Government committing to bringing forward a green paper to put the funding of social care onto a more sustainable footing.

• The cost of Gift Aid reforms is set to see the tax take to the Exchequer fall by £60 million over the forecast period, which means an extra £15 million a year going to charities. This is not a new measure, but an effect of the introduction of the Small Charitable Donations and Childcare Payments Act, which will come into force from next month.

• The Government has made plans to continue devolution, with one of the areas of focus ensuring that employers are able to take advantage of the opportunities provided by the apprenticeship levy, which could be of particular benefit to the many charities that are starting to introduce apprenticeship schemes.

We know that charities are struggling, with CAF’s research showing that one in five chief executives saying that their organisation is struggling to survive. Given this, many charities will be disappointed that there was no sector-wide support or plan announced today, and will want to make sure that neither central nor local government fails to make use of the sizeable contribution that charities deliver across the country.

As well as the small profile given to charities, it is also noticeable that the Chancellor failed to mention the ‘Shared Society,’ which was the Prime Minister’s vision of what the UK would look like under her premiership when she spoke at the Charity Commission earlier in the year.

Whilst this was the Government’s financial plan for post-Brexit Britain, it is clear that there is still a need to develop and deliver a social plan to match. Charities need to be at the heart of this, using their experience and expertise to help the Government deliver a society that works for everyone, that will heal divisions, bring the country back together and ensure that post-Brexit Britain matches the Government’s rhetoric.

This is the last Spring Budget, as from now on the Chancellor will be delivering the budget in the autumn, and what was the Autumn Statement in the Spring, rebadged as the Spring Statement. Attention in the political world now turns to Brexit, with the Government expected to invoke Article 50 next week, initiating the process of the UK leaving the EU. With the prospect of a Queen’s Speech in May, the implications of political developments are of continued importance. We’ll be doing what we can to ensure that charities are kept up-to-date with events and policies, and what it all means for them.

Want to let us know what you think about today’s Budget? Get in touch with us at campaigns@cafonline.org, or on twitter @cafonline.