George Osborne with the red box

Social investment and Alan Turing star in the budget

By Iona Joy 19 March 2014

Social investment relief could free-up billions of pounds for charities. And, as well as paying tribute to a British hero, the formation of an Alan Turing Foundation heralds a new commitment to sharing and analysing the sort of data which could make governments and charities alike work better.

A 30% tax relief for social investment up to £290,000, announced in today’s budget, should be welcome news to the social investment market. Players have been lobbying for tax incentives to get the market going for some time and so it will be interesting to see if this unlocks the potential they hope for—although this maximum may not match the scale of some players’ ambitions.

But before we celebrate too wildly, the devil is always in the detail with these things and I hope officials get it right. What will constitute social investment? As a taxpayer, I don’t want to fund a commercial enterprise masquerading as something it’s not just to get a tax break. Will qualification be dependent on type of corporate vehicle? Will there be limits as to size or ambition? NPC might pine for criteria based on achievement of social good, but as this is hard to demonstrate with sufficient certainty I doubt HMRC will share our enthusiasm. Indeed, Big Society Capital’s analysis indicates that the parameters are already quite firm, and binary in nature.

However, as the degree of social benefit varies massively between different investments, and if government is to forego tax receipts to support this sector, then reasonable confidence that this results in social benefit must be desirable, as our Chief Exec Dan Corry has previously argued. So efforts by the sector to up its game on evidencing social impact have just become more urgent..

There was scarcely anything in the budget of strategic interest to the charity sector. Relatively little on gift aid, with just a small item about gift aid outreach teams buried in the accompanying publication. And nothing on the current big issue for charities—public service commissioning. Wishes for something to ease public service contract procurement difficulties were not addressed. Instead we were handed a few peripheral sweeteners. £10m for scouts, guides, cadets and St John’s ambulance offered plenty of public appeal. NPC hopes the cash will translate into sustainable impact. The stuff about military and emergency service charities getting LIBOR fines, whilst nice and warm, felt like old news. I’d like to know more about the story behind Survivors for Peace and why they were singled out for rescue—with charities going to the wall with increasing regularity, I don’t see the government being able to bail out many individually.

Meanwhile I’ll be interested in how the likes of Age UK, Shelter, and Citizens’ Advice Bureau interpret the announcements on housing (will it really close the gap?); pensions (was this the government’s promised ‘rabbit’?); and welfare.

But what really put a smile on NPC’s face was news of the Alan Turing Institute for data. We love data, and we want it to be properly analysed. Let’s hope this Institute also promotes greater access to public data so that charities and public services alike can work out who needs what, and what’s working and what isn’t.

It would be good to join up the dots between the efforts of government departments like the Ministry of Justice (supporting the Justice Data Lab) and this new faculty. We can but hope…

As the dust settles… (or, The day after the budget before…)

But as the dust settles, we can’t escape the fact that many charities are going to find it harder and harder to meet increasing demand for services while making ends meet.

The analysis published by our colleagues over at the IPPR demonstrated just how much more money this budget is going to strip from government departments. £3.6bn is going from Communities and Local Government. Local authorities have been feeling the pinch already, cutting seemingly ‘nice to have’ services–services which in practice often prevent crises in people’s lives or head off future problems at the pass. More pain is likely to be felt most keenly by the charities providing these types of services. I predict more charities worrying about their existence. That said, extra funding for the NHS (£6.5bn) sweetens the pill a little.

Meanwhile my colleagues concerned with immigration, domestic violence and crime prevention are worried by the implications of the £3bn cut to the Home Office.

In the long-term, less cash might encourage smarter commissioning decisions by the government and more flexible practice by charities. Achieving such lasting changes, though, is unlikely to take place when the hollowing out of commissioning departments results in the loss of experienced staff willing to take risks.

So, a further squeeze awaits for charities which require public money to help people in need, alongside increased demand on other funding bodies who have limited scope to meet it. Tough times for the sector will plough on.