the Chancellor's red box

Last Spring Budget: Hope springs eternal for charities?

By Patrick Murray 2 March 2017

As the 2017 Budget approaches, speculation is rife on what the Chancellor might do next week. Here we take a look at what’s been in the news that might affect charities.

Social care in the spotlight

Surrey County Council hit the headlines recently with their courageous decision (in the Yes, Minister sense) to propose a referendum on a 15% council tax rise to pay for social care, before backing off at the last minute. That was followed by something that could have come straight out of The Thick of It with stories about text messages sent to the wrong Nick hinting at some sort of deal being done to alleviate the growing pressures in social care. Charities working in health and social care wait with baited breath to see the detail.

This is not the place many hoped to be just a couple of years ago. Many in the voluntary sector worked hard to influence the Care Act, which refreshed the legal framework for social care and came into place in April 2015. Charities welcomed new duties for councils to take decisions on the basis of a broader definition of a person’s well-being, to put prevention and integration at the heart of the health and social care system and to engage with providers to build a diverse market. Meanwhile the NHS Five Year Forward View offered a promising vision for the voluntary sector of moving health care out of hospitals into the community. But the funding crisis facing councils has blunted the impact of these reforms.

So will whatever is announced next week plug the gap? Rumours persist of a short-term injection of cash, and a longer term review. But will any money actually be new? Too often in the world of local government finance, reported new money turns out to be smoke and mirrors. Indeed reports this week suggest any new money will need to come from other efficiencies yet to be found by hard-pressed councils—a classic case of robbing Peter to pay Paul. So even if that short-term money provides a bit of a sticking plaster, other services like libraries, children’s centres or help for people experiencing homelessness could face further pressure. Charities who work with local authorities need to be vigilant about what might be coming.

As for the longer term review, it’s easy to forget that the Care Act followed the Dilnot Commission, whose central recommendation was a now ditched cap on the amount an individual would have to pay in care costs. The road to social care reform is paved with reviews, commissions and cross-party working groups. If there was an easy, long term solution that was cheap and popular it would have been done by now. Health and social care charities undoubtedly need to steel themselves for a fight to ensure the causes and beneficiaries they serve are not let down again.

In all this the row over NHS funding has taken a bit of a backseat, but it’s clear that despite the £10bn announced previously, the NHS is struggling. It seems for now though, that the focus is firmly on social care with the hope that will reduce some of the pressure in health.

Whatever happened to the JAMs?

Of course while social care is hitting the headlines there are other things on the government’s plate, not least the uncertainty of Brexit, and the fate of those who were briefly dubbed JAMs (apparently that’s not the done thing anymore). The Chancellor may have been handed a boost in news that borrowing may be lower, but it’s unlikely we’ll see some sort of rabbit-out-of-the-hat moment, a favourite of his predecessor, to please the masses. In the run-up to the triggering of Article 50 a favourite friend of another former Chancellor – prudence – is likely to win out. So charities hoping for a change of course on a range of policy areas affecting their beneficiaries, for example further changes to disability benefits, may well be disappointed.

Business rates and the economic outlook

One area that may see some movement is the revaluation of business rates, an issue that’s stirred up a powerful alliance of backbench Conservative MPs and business groups. Whilst the sector seems to have won (for now) the battle over the exemption for charities when business rates are devolved, the 20% discretionary rate that councils can award has come under pressure in recent years due to budget cuts. So whatever is announced next Wednesday is likely to have an impact on the finances of charities in areas where that discretionary rate has been removed.

Of course 8th March is usually better known as being International Women’s Day. So we’re delighted to have one of the country’s top female economists, Dame Kate Barker, joining us for a pre-budget breakfast briefing on how the economic outlook might affect the sector over the next few years. Dame Barker, of course, also led the excellent King’s Fund review on finding a sustainable future for health and social care, so it promises to be a very interesting discussion.