Budget 2018: A missed opportunity to deliver real change

Philip Hammond, Chancellor of the Exchequer, HM Treasury, United Kingdom - CC license, credit - Raul Mee (EU2017EE)

Sam Boyle | 2 November 2018

This week’s Budget was generally underwhelming for the fundraising and civil society sector more widely, but among these disappointments were some good policies for charities and their beneficiaries, says IoF’s policy officer Sam Boyle.

Another Budget, another opportunity missed to deliver much of real change for civil society. Given the ongoing uncertainty around Brexit, we were not expecting miracles. However, there were signs in the weeks leading up to Philip Hammond’s statement that a few more funds might ‘leak’ out of the Budget (who says the Chancellor doesn’t have a sense of humour).

The Prime Minister’s prior announcement that austerity was coming to an end had provided grounds for cautious optimism. With the chancellor announcing £20.5 billion worth of funding for the NHS over the next five years ahead of the Budget, we hoped that the government would find some more support to the charity sector, especially following the publication of the new Civil Society Strategy published a few months ago.

However, to say this optimism was entirely misplaced would be off the mark. There are some good policies included in this Budget which will help both charities and their beneficiaries. The raising of the individual limit in the Gift Aid Small Donations Scheme from £20 to £30 is a positive development.

Similarly, we have heard good things around trading – the upper limit has been raised from £5,000 to £8,000 before charities are eligible for tax liability, provided their turnover is £20,000 pounds or less. For larger charities – those who have a turnover of £200,000 or more, there is also good news – the upper limit has been raised from £50,000 to £80,000.

We also are pleased that business rates have been cut by a third for retail properties valued at under £51,000. While not specifically aimed at charities, this is welcome news for charity shops who are feeling the pressure of competition and high costs.

The announcement of £650 million to be distributed among local authorities for social care spending is also good news. Roughly 20% of all social care spending is used by the charity sector, which could mean another £130 million to the sector in the future.

There was also welcome funding for a number of specific projects. In total, £44.7 million was provided for charities in the Budget. This includes a £10 million commitment to support veterans with mental health needs, £10 million of capital funding for air ambulances and £15 million given to charities (and other suppliers) for distributing food surpluses.

So why we aren’t more excited?

Despite several rays of hope for charities, a quick look through the Budget and you will find that ‘charities’ appears just 6 times, ‘charity’ three times, and ‘fundraising’… a grand total of zero times.

This is disappointing. After positive messages from the government about the contribution of charities to public life in the Civil Society Strategy, we hoped that we would receive a robust and detailed financial commitment to our sector. Instead, we had a Budget largely devoid of major policy commitments.

Many of us in were also surprised that there was no mention of online platforms and Gift Aid – a policy which seemed to exist in the headlines last weekend, rather than in the Chancellor’s red box. We will wait to see what happens around this over the next few months.

There was also nothing further on the awaited £2 billion due to be released through the Dormant Assets Scheme. With local authorities still feeling the pinch of austerity, a commitment to spending some of these assets through grant funds would have gone a long way to ensuring that essential services are protected.

With reports suggesting that a number of departments face further cuts to their Budgets (with the notable exceptions of health and defence) it is vital that governments recognise the vital work that charities and fundraisers do.

Charities continue to punch above their weight in providing public benefit. Despite this, many of them face an uncertain future. With the spending review next year, the government has an opportunity to demonstrate its commitment to the third sector in more substantive terms than we have seen in this Budget.

Sam Boyle, IoF policy officer


  • Tagged:


Post a comment

Please click the box below to indicate you are a human rather than an automated system completing this form.