the Chancellor's red box

Where does the Autumn Statement leave the charity sector?

By Patrick Murray 23 November 2016

Today marked the first budget under a new Chancellor and Prime Minister, the first chance to see what the ‘just about managing’ agenda means in spending terms, and how the new Government will respond to the uncertainty caused by the Brexit vote in June. What became clear very quickly was that the big story is a decrease in growth forecasts caused by that uncertainty. With growth expected to drop from 2.2% to 1.4% next year, and 2.1% to 1.7% in 2018, the Chancellor needed every penny of the extra headroom he bought himself by relaxing Osborne’s deficit target. What was left over for jam tomorrow will be pretty thin indeed. Philip Hammond has tinkered with the Universal Credit taper and he has frozen the fuel duty—the latter has become an annual tradition so shouldn’t catch anyone by surprise any more.

The big focus was on the physical infrastructure and investment in innovation to strengthen the economy for potentially stormy times ahead, in theory at least. There was little said about investment in wider social challenges. The growing crisis in social care, for example, seemed to be ignored to the understandable consternation of charities and others working on these issues. And it was strange to hear a big set piece economic speech without any mention of the ‘Life Chances’ agenda championed by the previous Chancellor that held some promise for charities working with the most disadvantaged. There was however £500m promised to the Ministry of Justice for the prison reform agenda, including to pay for 2,500 extra prison officers.

Housing was a winner though. Finally seen as part of the physical infrastructure the country needs, the widely trailed £1.4bn investment for 40,000 homes comes with greater flexibility on how existing funds are spent – a move welcomed by housing associations. Meanwhile the banning of letting agent fees is undoubtedly a win for charities such as Shelter, who campaigned hard for this change.

But for those charities actually delivering homelessness services, running domestic violence refuges, or providing housing for the elderly, those with learning disabilities, or people leaving care or prison, there was not much new beyond an extra £10m over the next two years in the rough sleeping fund. Instead, their eyes will be on the publication of the 18 month review by the Department for Work & Pensions  into the supported housing sector, and the consultation launched yesterday on a future funding model. Get that wrong and a sector where many have been teetering on the brink from cuts to care and support will go over the edge.

As for the devolution agenda, another favourite of years gone by, there were a few new deals announced but no new mayors. As some have pointed out, this may mean a number of areas missing out. The big announcements were that metro mayors will get some borrowing powers for infrastructure, and London will get some extra powers over the adult education budget and the Work and Health programme. As we discussed at our party conference events, these new mayors will be important figures for charities to engage with where they exist.

As ever, there were a few titbits for the charity sector more broadly. The annual Libor fine giveaway—this time £102m to armed forces and services charities continued, along with £3m to Comic Relief from the tampon tax to distribute to women’s charities. As we’ve argued before, the Government could be a lot more strategic in how this money is spent. There was mention of some changes to Gift Aid to simplify digital donations, and the cap for the amount that social enterprises can raised Social Investment Tax Relief has increased to £1.5m. The stately home, Wentworth Woodhouse near Rotherham, got a somewhat bizarrely high profile spot in the Chancellor’s speech but museums and galleries more broadly will benefit from a broadening out of tax relief. And refugee charities may see some hope in changes to welfare rules which mean that refugees will no longer have to be resident for two years before qualifying for disability benefits. But with the scale of the challenge faced by people fleeing Syria and many other dangerous parts of the world some might have hoped for more action here.

So what did we ultimately learn about the May Government’s priorities and what it all means for the sector beyond what had already leaked out to the press? In truth, not a lot. The big picture remains that Brexit trumps all. And the government’s approach to this and to other issues is still hard to read. If charities want to get their causes on the agenda in this new reality there is much to be done.