andy Frain 120

Andy Frain

Former Campaigns and Public Affairs Manager

Charities Aid Foundation

The Budget: Successful Levelling Up Must have Charities at the Heart of Decision Making

27 October 2021

The Budget contained some positives for charities, but the potential of the Levelling Up agenda can only be fulfilled by giving the sector a seat at the table writes CAF's Campaigns & Public Affairs Manager Andy Frain. 

Traditionally, Budgets in the UK have been like Christmas – they have come around once a year, and it is a rare occasion where drinking at midday is actively encouraged. Evidently such traditions do not burden Chancellor Rishi Sunak, who opted for water as he delivered his second Budget of 2021, in addition to the three-year Spending Review. Thanks to a cut to beer duty, those who did start drinking at midday will have found much to cheer in the Budget, whereas for the charity sector it was a slightly more mixed picture. 

Whilst March’s Budget was still conducted in the midst of the pandemic-induced lockdown restrictions, the October edition was one focused squarely on rebuilding the economy following the easing of restrictions.  

The post-Covid rebuild, along with the Government’s long-standing aspiration to “level up” parts of the country and the economy, are the two stand-out domestic priorities for charities and philanthropists in the UK and this budget’s emphasis on both issues is to be welcomed.  

There remain major concerns for the sector, however, particularly on key issues such as infrastructure, health and the practicalities of how levelling up can be achieved effectively. 

 

Levelling Up

We know that the Government shares the charity sector’s commitment to developing new approaches in areas that have not benefited from growth, which will be key to addressing both the UK’s low productivity, and ‘levelling up’ all our communities in the coming years. Whilst this Budget did contain a lot of material on this, there are still areas where charities believe Government could go further. 

Perhaps most prominently, the long-trailed Levelling Up White Paper remains notable by its absence. Along with other charities and civil society organisations, CAF was pleased to respond to Neil O’Brien’s consultation on the topic this summer and the decision to actively seek charities’ input was a welcome one. For that reason, the report’s continued delay is disappointing, and we hope the newly formed Department for Levelling Up, Housing & Communities will publish it before the end of the year.

One step forward in this regard was the first indications of what both the Levelling Up Fund and the UK Shared Prosperity Fund might look like. Although the announcements in the Budget are light on detail, both of these funds will be vital for the future role of charities within the UK and will be watched closely by the sector as further information emerges. 

So far, the schemes that the Levelling Up Fund have been confirmed to support, as well as a number of announcements from the Budget more generally, are focused on public transport and physical infrastructure. However, as detailed in the cross-sector Spending Review submission that CAF supported, levelling up is a social challenge rather than just an infrastructural one. 

Charities and social enterprises will be key to tackling economic, health and societal challenges in deprived parts of the country. Although it was not mentioned in the Budget, CAF and others will continue to call on the Government to use the next wave of dormant assets, which should continue to flow through charities and social enterprises as the primary delivery organisations, to create a permanent multi-billion pound national endowment for the communities that benefit less from Britain’s wider economic prosperity. 

Additionally, a Community Wealth Fund would devolve funding decisions directly to residents within these neighbourhoods, in order to build the confidence and capacity of local residents, whilst providing them with the support to deliver sustainable change for their area. This would give local people the power to create and maintain independent community services and community spaces, and provide them with the capabilities to achieve their aspirations for their areas. 


International Development

In the absence of an immediate reversal to the cut, the Chancellor’s pledge to return to the 0.7% foreign aid spending commitment by the end of this Parliament is a positive step, but it will be scant consolation to the charities still reeling from the fallout of the initial decision to cut funding. 

The twin effects of the aid budget cut and the pandemic has meant that charities working in the sector have had their fundraising options severely limited from March 2020 onwards, and the cloudy timeline offered by the Chancellor means that this uncertainty could continue until as late as 2025. 

Clarity on the specifics of the timeline would go a long way to allowing charities to plan for their medium-term operations and we hope the Government will commit to a fixed plan for the return to the 0.7% commitment in due course. 

In the meantime, Government should open up dialogue and collaborative channels with charities working in the space, many of whom have been UK Aid partners for a number of years. Without support networks in place, many charities will struggle to cope with the combined pressures of increased demand and reduced funding and could face the prospect of closing their doors for good. 

 

Health

Naturally, health was a dominant theme and frontline health charities will welcome the commitment to reducing the backlog for scans and diagnoses that has built up during the pandemic. 
There are, however, significant imbalances in the medical infrastructure of the UK that remain in need of urgent address. 

Most notably, the UK’s health and social care network relies disproportionately on charities to help support those with disabilities on a day-to-day basis, to the extent that charities have become an inherent part of the NHS’ disability strategy. However, changing habits of giving during the pandemic have left a number of disability charities facing considerable financial deficits and without this issue being addressed, service provision will begin to suffer. Whilst there are welcome provisions to support school places for children with additional support needs, we would urge the Government to work with specialist disability charities to come up with a solution to these funding challenges for the wider disabled population. 

Additionally, health research charities have also seen dramatic falls in income over the pandemic, as donors chose to support alternative health charities. The budget’s £5bn for health-related research and development, including a commitment towards tackling health inequalities, is therefore hugely welcomed in principle, although it is essential that any such spending is targeted to the causes and organisations that will see the maximum effect of the funding.  

 

Skills

The Chancellor rightfully acknowledged that retraining and upskilling the British workforce will be key to adapting to new ways of living and new technologies. Programmes like Skills Bootcamps and the Multiply scheme announced in the Budget are a positive step but it is vital that the mistakes of similar programmes in the past are not repeated. Specifically, the “Help-to-Grow” scheme announced in the previous Budget had a similar aim of upskilling the workforce but focused on SME’s to the specific exclusion of charities. 

Charities employ hundreds of thousands of people in all corners of the UK and are key contributors to local economies and service provision. It is therefore necessary that they are given the same platform as businesses to adapt to new technologies and cultural shifts, most notably the pivot to digital. As well as having a direct effect on many charitable services, digitisation has had a profound impact on the ability of charities to fundraise. Towards the end of last year, nearly two thirds of UK charities were not currently fundraising online and the post-lockdown economic bounce has not seen a concurrent bounce back of cash. 

We would therefore encourage the Government to give charities a seat at the table in schemes designed for SMEs, reflecting their importance to the UK’s economic infrastructure and to support future innovation within the sector. 

Overall, we would encourage the Government to view charities as a strategic partner and to recognise the pivotal role charitable organisations play in the economic and social wellbeing of the country.