Funding news

The Budget and the Voluntary Sector - 23 June 2010

The Budget will place a huge burden on charities and voluntary organisations, voluntary sector umbrella bodies have warned.

They were reacting to the principal measures announced by the Chancellor, George Osborne, which include a 25 per cent cut in the budgets of government departments other than health and international development over the next four years.

We have produced our own breakdown of the affects of the budget on the sector, this is available here.

Other Key Points have been outlined by the NCVO as:

  • VAT increase to 20% in January 2011 Although this will impact on the sector, the Government has committed to work with sector bodies to assess the feasibility of implementing the EU cost-sharing exemption in VAT.  A formal consultation on this will be launched in the autumn.
  • A bank levy will be introduced, which will apply to the balance sheets of UK banks and building societies and the UK operations of foreign banks. Smaller banks will not have to pay. This is expected to raise more than £2 billion a year.
  • Councils which propose low council tax increases will be offered extra funds to allow them to freeze council tax for one year from April 2011.
  • A Regional Growth Fund will be created to help fund regional capital projects over two years.
  • The welfare budget has been cut by £11 billion.
  • The Budget includes a commitment to continue to work with the sector, including the Gift Aid forum, to improve the system and to encourage more charitable giving.  Here at NCVO, we will be working to persuade government of the need to simplify the current system through its work with the Gift Aid forum and wider representations to government.
  • Substantial charity donors HMRC intends to replace the current rules and will be consulting informally on this through the summer. Full legislation will be published in the autumn. 
  • The National Lottery Alongside the Government’s consultation on the allocation of good causes funding from the National Lottery, the Government will review the current National Lottery taxation arrangements. 

Furthermore, Charities minister Nick Hurd has indicated that government funding for Capacitybuilders and the volunteering charity v is also under review. The OCS spokesman said all of the department's spending was potentially under review because of the need to reduce the national deficit.

The Comprehensive Spending Review (CSR), announcing further changes will be presented on Wednesday 20 October 2010.

For further comment see the Third Sector article.

For more information go to the NCVO website.