News

VAT not on Miliband's radar

Finance | Gareth Jones | 1 Jun 2006

The voluntary sector's£500m irrecoverable VAT bill is "not my focus" and "remains a matter for the Treasury", the sector's new minister has said. In an interview with Charity Finance, Ed Miliband said: "Two reviews have looked at this issue and neither found an equitable way of separating out some organisations from others." He continued: "That is not to say I don't understand people's concerns about it, but tax itself remains a matter for the Treasury."

The new office will bring together various programmes from across Whitehall. The minister met representatives from the sector at two events last month - the launch of the new Office of Charity and Third Sector Finance in the Treasury and a meeting with members of the social enterprise sector at the Hoxton Apprentice. In his speeches he said the creation of his new office in the Cabinet Office was a recognition that the sector "needs to be at the heart of what government does" and that he aimed to be a "voice across government for the sector".

The launch of the Treasury office coincided with the launch of the crosscutting review of the sector's role, which will inform government spending priorities for the next few years. Miliband said he had already identified five issues that the review should address, including removing barriers to more service delivery, more support for social enterprises, and improving the sector's resource base.

At the social enterprise event, Miliband unveiled figures showing that social enterprises contribute £8.4 billion a year to the UK economy, almost 1 per cent of GDP. Upon being told of the huge bureaucratic burden imposed on social enterprises by Regional Development Agencies and the difficulty voluntary organisations have in winning service delivery contracts, he promised to "listen and learn" but added that he was "action-oriented" and "not interested in process for process's sake".

"Judge me on results," he said. "I am confident that with the backing of the Prime Minister and the Chancellor, RDAs will take social enterprises more seriously than they did before. And with full respect to the ACU and the Social Enterprise Unit, they were part of much broader departments, whereas this is my sole responsibility."

Speaking to Charity Finance later, Miliband said that in a year's time, he hoped people would say that he is "someone who has been a voice for them and shared their concerns". He added that he was determined to improve the public's awareness of the sector. "I want people to know that there is this distinctive but diverse sector and part of my job is to evangelise with that message."