Charities are facing a “dangerous cocktail of cost pressures” and the Budget’s lack of support for the sector “was a massive missed opportunity”, the Charity Finance Group’s chief executive has said.

In response to today's Budget, Caron Bradshaw said that the sector had missed out on the opportunities and reliefs that small businesses have been awarded, despite the capital generated by the sector and support it offers to the vulnerable.

She said: “Like the wider economy, charities are facing a dangerous cocktail of cost pressures such as the National Living Wage and Apprenticeships Levy as well as disappearing grants and more challenging contracting. Yet cuts for private businesses were not met with a similar package of support for charities.

“Small businesses play a vital role in communities, but the Chancellor needs to recognise the role that charities play – providing supported for marginalised, vulnerable and voiceless. Charities are also a big economic actor - employing hundreds of thousands of people and generate billions for the economy every year”.

She went on to say that the government needs to “adopt a more strategic approach when it comes to investing in the charity sector and recognise that supporting our sector is the one of the best ways for it to achieve positive social change”.

NCVO said that it was encouraging that there were “no top-line changes to charitable business rate relief”, but added that “we will have to wait for detail about what is happening in areas with pilots of devolved business rates”.

A spokesman added: “Along with others, we’ve been making the case firmly to the Treasury in recent months that these reliefs are genuinely vital for tens of thousands of charities”.

Charlotte Ravenscroft, head of policy and public affairs at NCVO, added that "overall the picture is one of considerable cuts to departmental budgets and local government.” And that it is "still a challenge for the sector and their beneficiaries".

‘Not jam tomorrow’

Acevo’s chief executive, Sir Stephen Bubb, said: “The budget was not so much jam tomorrow as problems down the line. The Chancellor has asked the Paymaster General to find £3.5bn worth of cuts. This will inevitably impact the social care and local government sectors.

“Ultimately, despite extra funding for rough sleeping, cuts to the most vulnerable including disabled people means a weaker social fabric overall. The northern powerhouse risks being accompanied by a northern poorhouse”.

He went on to welcome the sugar tax, adding that “this victory demonstrates the value of charity campaigning to sound policy making”.

But he added: “In light of this, it is a matter of regret that the new set of grant agreements announced as part of the Government's annual banking/Libor fines disbursement will now have anti advocacy gagging clauses contained within them. The Government must rethink this harmful measure as a matter of urgency”.

‘A tidy-up budget’

John Hemming, chair of the Charity Tax Group, has described today’s budget as a “tidy-up” budget, which he says “overall, positive” but “does not include major new policy initiatives affecting charities”. He said that the most significant development is the maintaining of the 80 per cent mandatory business rate relief which is given to charities.

He said: “This has been an interesting, tidying-up Budget with some important announcements, the most significant of which is the assurance we’ve received from Treasury officials that the 80% mandatory business rate relief that is given to charities will be maintained, which is very welcome.

“Some charities may also benefit from the extension of the small business rate relief although discretionary rate relief for charities is likely to be squeezed again.  Some of the new anti-avoidance measures will require close scrutiny to ensure that they do not inadvertently affect charities, as happened with the close company loans to participators, from which CTG successfully lobbied for an exemption for charities which the Chancellor has confirmed will be in this year’s Finance Bill”.

Likewise, Social Enterprise UK described it as a “low-key budget”. Deputy chief executive Nick Temple said some social enterprises will welcome many of the announcements aimed at small and medium business.

But he added: “What is missing is the connection between policies and a focus on treating symptoms rather than tackling causes”.

Neil Cleeveley, chief executive of Navca, said: “Charities have consistently been told that there is no money. Maybe we should remind ourselves that this budget announced how the government will raise £716bn to spend next year. We should be more assertive in calling for investment in the amazing things charities do to enhance our lives. For example more small grants for preventative work in communities that saves later costly interventions.

“Previously the Chancellor said that local authorities funding will primarily be from will retaining business rates. Local authorities have been a major funder of smaller charities. Permanently doubling the Small Business Rate Relief and extending thresholds will cost £1.5bn a year. We fear this will result in further cuts to local government funding, which is likely to disproportionately hurt smaller charities”.