Could do better: Budget reaction round up
Melanie May | 28 October 2021 | News
While there were some positives, yesterday’s Budget lacks detail, does not go far enough, and could see charities left with a £6.6 billion funding gap from the pandemic, charities and representational bodies have said.
Positive steps noted included the announcements of a commitment to support health research and development, the Recovery Loan Scheme extension, more government funding for community sports facilities across England, and the first projects from the Levelling Up Fund.
However, charities also drew attention to the funding pressures they are under, and called for the government to collaborate more closely with the sector as well as give it a greater voice to help address the country’s health and social inequalities.
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A £6.6bn pandemic scar for charity sector
Matt Whittaker, CEO of Pro Bono Economics:
“The Chancellor has given a vital boost to public services and offered a helping hand to workers faced with a cost of living crisis through his pledges on Universal Credit and the National Living Wage.
“But this does little to help the country’s most vulnerable, including the 700,000 long-term unemployed, who have been hardest-hit by the pandemic. Charities are vital to supporting those at the sharp end of society, but the OBR’s forecasts for household spending imply that the sector could be heading into winter with a permanent £6.6 billion gap in public giving as a result of the pandemic.
“All of this makes it even more disappointing to see charities once again conspicuous by their absence in the Treasury’s documents. The sector employs nearly a million people in the UK and has provided a lifeline throughout the pandemic, yet it remains overlooked by too many of the nation’s policymakers.
“There was also very little evidence in the Chancellor’s speech of investment in the ‘vibrant communities’ the government has promised to enhance. The government says that improving social infrastructure in the UK’s communities is essential to ‘levelling up’ but has failed to commit to this with funding.”
Recovery Loan Scheme extension welcomed but reduction in government guarantee disappointing
Stephen Muers, CEO, Big Society Capital:
“We welcome the extension of the Recovery Loan Scheme, which has been critical in enabling social enterprises and charities to access affordable investment, however, we are disappointed in the reduction of the government guarantee from 80% to 70%.
“With many of the social enterprises and charities we support based in the UK’s most disadvantaged communities, this extension is vital in enabling the UK to Level Up. We hope the support provided by loan schemes like these will continue throughout the COVID-19 crisis and beyond – providing invaluable support for the communities that need it the most.”
Insufficient investment in social infrastructure & too little detail
Tony Armstrong, Chief Executive of Locality:
“This budget and spending review was a big opportunity to define the government’s flagship levelling up agenda and chart a new course for the country after the huge challenges of the last 18 months.
“In aiming to inspire an ‘age of optimism’, the Chancellor has used the greater flexibility in the figures granted by the Office for Budget Responsibility to make significant spending pledges. Most notably announcements on universal credit, early years support, youth centres and local government funding are a vital course correction after a decade of disinvestment.
“However, when it comes to economic development, both the style and substance of the Chancellor’s speech reinforced a business-as-usual approach. Treasury control over the Levelling Up Fund may have enabled some good party political lines in the Commons, but it highlighted a centralising tendency that’s the wrong way to maximise local potential. What’s more, the focus in the main on big ticket infrastructure projects fails to give enough priority to investment in the underlying social infrastructure which is required to make investment stick for the long-term.
“The UK Shared Prosperity Fund was finally launched, but beyond a major new numeracy scheme, we still await details on the design. This Fund should present the core substance to the levelling up agenda, so it’s vital that it breaks free from Treasury orthodoxy to enable local communities to invest in their own priorities for the local economy.
“The Community Ownership Fund is a brilliant opportunity to save local spaces and empower local communities and we were pleased to see the first 21 projects announced. However, we know this first round has excluded many of the most enterprising community organisations, due to the tight eligibility criteria. It’s vital that future rounds are more flexible and more developmental in order to support more of the transformative community ownership projects we know are out there, ready to go across the country.
“The detail of levelling up has been deferred to the Levelling Up White Paper which we now expect in the coming months. Community power can be the thread that knits the levelling up agenda together and connects it to people’s lives. Shifts in the patterns of economic development spending need to be accompanied by lasting shifts in power. With talk of new and improved devolution deals, these need to involve ‘onward devolution’, creating powerful new institutions at the neighbourhood level. Local people know best where the opportunities to drive forward their neighbourhoods are – we need to put them in charge.”
Further £205m funding for community sports facilities welcomed
Robert Sullivan, CEO, Football Foundation:
“This investment is welcome news for all those involved in grassroots football across the country. We know that playing on good quality facilities helps people get fitter, improves mental wellbeing, grows confidence and builds stronger relationships. This is all essential for individuals and communities as we emerge out of the Covid-19 crisis.
“With the government, Premier League and The FA’s investment, we have made plenty of progress in the last two decades, but there is still lots of work to do to ensure all communities across England get the standard of local sports facilities they need and deserve. This new funding will unlock the power of even more pitches to help transform people’s lives.”
More focus needed on social infrastructure & a greater voice for charities
Neil Heslop, CEO, Charities Aid Foundation:
“Levelling up is about empowering communities, and no group is more embedded in local communities than the charitable organisations working on the ground. As well as offering employment and growth opportunities for the area, charities act as a precious voice for groups that are too often excluded from existing structures. Giving charities a seat at the table for localised decision making will be crucial if levelling up is to truly ensure that no one is left behind.
“We share the Government’s commitment to supporting areas that have not sufficiently benefited from the UK’s prosperity and today’s Budget contains several positive steps. In particular, the commitment to support health research and development is good news, given the immense financial pressures on charities in the sector currently, as well as the announcement of the first projects from the Levelling Up Fund.
“However, levelling up must address more than just economic imbalances, and whilst the focus on local infrastructure is understandable, social infrastructure is important for a successful recovery. We urge the Government to collaborate to give charities a greater voice, which will be key to addressing the health and social inequalities seen across the country.
“The Chancellor’s pledge to return to the 0.7% foreign aid spending commitment by the end of this Parliament will not alleviate the drastic shortfalls facing charities working across the world today and we continue to encourage the Government to work with development charities to minimise the effect of the cuts in the interim period.”
Minimum pay rise welcome but not enough to cover rising cost of living
Adrian Axtell, National Secretary of Community:
“The charity sector has felt the brunt of the pandemic. Urgent support is needed to get the sector, its workers and the whole country back on its feet. Whilst the announcement today is a step in the correct direction, it still falls far short of what the sector needs.
“Whilst we welcome the minimum wage rise, this will be mostly blunted by the rise in inflation. We’re very clear that any wage rise below the rise in cost of living is a pay cut, and the government must back Labour’s plans to raise the minimum wage to £10 per hour, effective immediately. Recent research has showed us that a fifth of third sector workers are earning below the living wage, meaning that steep cost of living increases will be felt particularly harshly by those in our sector. Missing from the budget was enough action to tackle the spiralling cost of living we know is felt by so many in our sector.
“The Institute for Fiscal Studies has said the living wage increase will be blunted by inflation, and that those on universal credit will see their disposable income go up by just £250 because their taxes rise and benefit receipt falls as their earnings increase. The reducing of income for those least well-off is a major driver behind the increasing demands on charity services, and so far the government has so far produced no plan for this.
“With the third sector recently losing its dedicated minister and now being merged back in with other sectors, we need firm commitments that the government won’t lose sight of the people who provide valued services to millions of people across the country. The budget today had some welcome moves, but still was not enough. We need more action, and we need it now.”
About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.