Spring budget 2024: What it means for charities

Today’s spring budget was likely the government’s final opportunity to set out spending plans before the next general election. They’ve approached it as a key moment to influence voters.

Today could have also been a key moment to bolster and empower the voluntary sector. But yet again the government missed this opportunity.

Following a decade of cuts to public services, the covid-19 pandemic, and the cost of living crisis, the voluntary sector is doing its best to meet high and growing demand with shrinking resources. Our submission to the spring budget called on the government to make four changes to help ease this pressure.

1. Increase funding to public bodies. This would allow them to increase grants and contracts to meet the true costs of delivering public services.
2. Invest in infrastructure to help deliver the UK Shared Prosperity Fund.
3. Support the voluntary sector to improve its energy efficiency.
4. Ensure that people have enough money to live with dignity by introducing an ‘essentials guarantee’.

We also signed up to the Civil Society Group’s (CSG) budget submission. Like us, the CSG called for an ‘essentials guarantee’ and increased funding to public bodies to meet the true costs of delivering public services. The CSG also asked the government to:

• extend levelling up funding, including the UK Shared Prosperity Fund, to 2030 to match the Levelling Up mission’s timetable
• streamline and review the charity tax and compliance systems. This includes addressing the irrecoverable VAT for charities.

We welcome some of the Chancellor’s budget announcements.

A few of the measures will benefit households that are struggling financially.

• The Household Support Fund will be extended until September.
• People receiving Universal Credit will now have twice as long to repay loans. The £90 fee for debt relief orders will also be scrapped.
• The threshold for child benefit will be increased. This will provide more resource and security for an estimated 170,000 families.

Announcements that are likely to benefit voluntary organisations include the following.

• The VAT registration threshold will increase from £85,000 to £90,000.
• £5m new investment in the Platinum Jubilee Village Halls Fund.
• Funding for community cultural projects and the National Theatre.
• Investment in early career researchers in medical charities.

However, today’s budget was most notable for what it didn’t include. Once again, the government has missed a critical opportunity to recognise the role the voluntary sector plays in our society, and back this up with spending and policy commitments.

Today’s budget won’t improve things very much for most people seeking support from charities. The measures to support financially struggling households don’t go far enough. Keeping tax thresholds frozen will ‘drag’ many workers into paying higher rates of tax (pdf, 450KB) as wages rise alongside inflation. This is despite today’s announcement of reduced national insurance rates.

The government has also refused to commit to an ‘essentials guarantee’ to support people receiving benefits. This guarantee would ensure universal credit covers essentials like food, household bills, and travel costs.

We’re relieved to hear planned funding for central government departments won’t be cut. However, this funding is still not enough to fund public services that meet communities’ needs. Local government finances are also under unprecedented pressure. Today’s announcements do nothing to address this.

The government has failed to recognise the voluntary sector’s role in driving sustainable, inclusive growth.

For many years, voluntary organisations have provided increasing emergency support for people in crisis. For example, in January 2024 Citizens Advice provided more food bank referrals than ever before. The sector has been forced to focus on filling immediate gaps instead of strategically planning for the future.

When voluntary organisations have resources and headspace, they’re a force for both good and growth in their communities. They:

• put people’s strengths and needs at the centre of their services
• develop tailored approaches and solutions
• invest surplus money in improving services
• do preventative work that improves people’s wellbeing and eases pressure on other services
• engage volunteers, build community, and provide ways for people to get involved in causes they care about
• employ staff and support people to move into the workforce.

Through both the work they do and the ways they do it, voluntary organisations improve communities and lives.

NCVO, the CSG, and others across the sector have long called for government to reinvest in voluntary organisations. As a sector, we play a key role in strengthening communities, reducing inequality, and driving sustainable, inclusive growth.

With their eyes fixed firmly on the upcoming general election, it’s disappointing that government clearly doesn’t see us this way. It’s people and communities who will continue to pay the price of government’s inaction to support the voluntary sector.