On Wednesday 22 November, Chancellor Jeremy Hunt presented the Autumn Statement in Parliament. There were some welcome measures announced, such as raising benefits in line with the 6.7% inflation figure, the 2% cut to employees’ National Insurance, the abolishment of Class II National Insurance Contributions, the increase in national wage £10.42, unfreezing the housing benefit and raising Local Housing Allowance rates to the 30th percentile and the 8.5% rise in the state pension. Whilst it’s welcome that the Chancellor is reflecting the rise in inflation in some benefits, which, after all, is only to be expected, the cut in National Insurance, though making a short-term impact in people’s wages, may have a longer-term impact on the funding of public services. Despite the tax cuts, due to slow economic growth, persistent inflation and rising tax levels, the average household would be £1,900 poorer by January 2025 than they were in December 2019, so the likelihood of people turning to charities and voluntary organisations for help is going to increase.
It is disheartening to hear the government’s plan to withdraw benefits such as free prescriptions and legal aid, plus NHS support from people who are not well enough to work. This policy proposal is counterproductive as Disability Charity ‘Scope’ has pointed out that threatening people with more sanctions will not lead to more disabled people getting into and staying in work. Moreover, it will simply add to the stress and anxiety that disabled people already face.
ACEVO supported the Civil Society Group’s asks which were submitted ahead of the Autumn Statement, however, only one (expanding the VAT relief available for energy-saving materials to include buildings used solely for a relevant charitable purpose) was addressed, leaving many in the sector, disappointed and frustrated. It is perhaps though not entirely surprising that the Autumn Statement did not include any specific measures for the charity sector, being very likely the last opportunity the current government has to announce any fiscal reforms or incentives ahead of the next general election.
Charities are essential to the provision of public services, without which hundreds of thousands of individuals and communities would have little to no comfort. Service demands are continuing to rise alongside an increase in operating costs. The Institute for Government’s Performance Tracker 2023 has made evident that all public services other than children’s social care could be performing worse in 2027/28 than on the eve of the pandemic. The tight spending plans announced by the Chancellor post-election are particularly concerning. The knock-on effect would be potential public service cuts, which would be significant for our sector as it means a potential lack of funds to uplift grants and contracts for public services delivery.
Despite the Chancellor’s aim to showcase the government’s compassion, concern remains over the lack of protection for people’s essential living costs and the increasingly pressured financial environment for much needed charities. The Office for National Statistics has revealed that food prices have risen by about 30% since 2021 and the cost-of-living crisis is stretching household budgets thin, especially for those on low incomes who are being hardest hit by bills, whether that’s in relation to food or energy. It is time the government recognises the role of charities and voluntary organisations in all its endeavours and supports its vital role in the social fabric of communities, the economy and the public services ecosystem. As the next general election looms ever closer, we want to see commitments to helping those who are hardest hit by the cost-of-living crisis, plus funding for desperately needed public services that help all in society.
Additional measures that were not mentioned in the announcement but which are of interest:
- A £10m fund to provide employment support for people who have experienced domestic abuse, and to prevent them experiencing further abuse. There will also be £2m in additional funding to expand the Flexible Fund, which provides one-off payments to people who have experienced domestic abuse.
- An additional £7m over three years to support organisations working to combat antisemitism in schools and universities.
If you have any questions or concerns, please get in touch.
