Economic Outlook: Act now, ahead of the curve

02 Apr 2024 Expert insight

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It was fantastic to see so many charity trustees at the ICAEW Big Trustee Breakfast last month. The event’s theme – navigating uncertainty – aptly captured the anxieties of a number of charity boards, which was particularly fitting for the current economic climate.

The chancellor’s spring budget earlier this month can be characterised as “a no-surprises budget” ( and is not expected to shift the dial significantly in terms of the UK economy. With constrained public finances presenting considerable headwinds, and a need to maintain equilibrium amidst a precarious economic position, there was no major course change. While some individual measures were welcome, in this context, it was unsurprising that the response from the sector was largely lukewarm.

The Office for National Statistics (ONS) reported that the UK economy grew by 0.2% month-on-month in January 2024, following a fall of 0.1% the month prior. This is a continuation of the trend of the UK suffering from sluggish economic activity, alternating between an economy that is growing and shrinking.

The annual growth in regular pay continued a move downward to 6.1% in the three months to January 2024, according to the ONS. While unemployment remained relatively stable, the number of vacancies for which employers are actively recruiting has continued to fall for the 20th continuous period; albeit this remains above the levels before the pandemic. There were also 203,000 working days lost because of labour disputes across the UK in January 2024, with the health and social care industry being particularly affected.

Financial forecasts

A razor-sharp focus on financial forecasts remains paramount, with a number of charities running an increasingly tight ship. There have been examples of charities incurring expenditure with the expectation of receiving income that has not come to fruition. This has led to a greater spotlight being cast on costs – with staff costs often forming a significant proportion, charities have needed to (re-)examine their workforce requirements.

A cost base that is fit for the future, while enabling charities to deliver their strategy, is key and it’s critical that charitable purpose remains at the core. Although course corrections may be needed, it’s never easy to find the balance between saving to ensure financial sustainability and investing to maximise impact. However, it’s important for charities to proactively seize the moment and act now (, ahead of the curve, before it’s too late and they run out of road.

Daniel Chan is a director at PwC  

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