Charity sector leaders have said while the Budget includes some welcome giveaways, it does not tackle structural problems for the sector or mention several previously promised measures, especially a £40m Local Sustainability Fund.
Karl Wilding (pictured), director of public policy at NCVO, said that while there were “lots of small, Daily Mail-friendly measures” announced to help charities, the Budget lacked any “large-scale strategic thinking about the sector”.
He said that while NCVO welcomed VAT refunds for some charities, the sector needed not targeted measures for small groups but a discussion about irrecoverable VAT and issues like VAT on shared services which prevent charities collaborating.
“One potentially significant issue is that they’ve agreed to legislate on digital gift aid,” he said. “That may have an important impact. But for the most part they haven’t tackled the big strategic thinking.”
He said that while small pots of funding were interesting, a more problematic issue was the massive cuts in the budgets of big departments which fund the sector, such as the Department for Communities and Local Government and the Cabinet Office.
Caron Bradshaw, chief executive of the Charity Finance Group, said: “This sounds like a budget where we’re going to need to read the background papers even more carefully than usual. As always the devil is going to the in the detail but there were some welcome announcements for some of our sector. Austerity pressure is going to continue, whoever forms the next government; particularly at a local level."
Angry reaction to lack of sustainability fund
The omission of any mention of a promised £40m Local Sustainability Fund angered bodies including Acevo and Navca.
In a statement, Acevo chief executive Sir Stephen Bubb criticised the Office for Civil Society’s “major failure” to deliver the fund as was originally promised under former civil society minister Nick Hurd.
“The failure to announce this fund to help local charities is a major failure for the Office for Civil Society and its leadership," he said. "It is a sign of a government that no longer cares or wants to speak about the effect its cuts have had on our local communities."
Bubb attacked Hurd’s eventual successor as minister for civil society, Rob Wilson, saying: “Serious questions must be asked of Hurd's successors, their lack of care and their failure to deliver.”
Neil Cleeveley, chief executive of Navca, said that despite having been supposedly supported by three civil society ministers, the reasons why the fund still remains absent from the Budget needs to be “cleared up”.
“I am shocked that there’s no mention of the long promised Local Sustainability Fund," he said. "Successive ministers have promised it, so we have to know if it’s been ditched or if it’s just got stuck in the system.”
Other perceived exemptions
A charity exemption from the Autumn Statement’s Diverted Profits Tax – aimed at large groups of companies hoping to reduce the amount of tax paid in the UK – was also not directly mentioned in the Budget.
John Hemming, the chair of the Charity Tax Group, said he remained “hopeful that our call for a specific charity exemption will be heeded”, after conversations with HMRC.
While nothing was mentioned in this Budget about a promised reform of the level of benefits charities can provide to donors without tax implications, the Institute of Fundraising remains convinced that a review of the rules will be extended to provide “best help for charities and donors to maximise uptake on eligible donations” as was announced in the Autumn Statement.
