Did The Budget ignore charities?

1st December 2017
Did The Budget ignore charities?

Charity leaders claim that The Budget has largely side-lined charities, especially in the child and social welfare sectorCharities were not completely overlooked and received a simplification of the Gift Aid Donor Benefits system and a promise that the Government would invest further in Armed Forces and Emergency Services charities, though charities say that this is superficial at best.

What did The Budget give charities?

Gift Aid donor benefit rules will be amended to reduce the number of monetary thresholds that set out how much charities can give as benefits to donors for donations from three to two, whilst also being able to claim Gift Aid on it. This means that from April 2019, benefits can be worth up to 25% of donations up to £100 and up to 5% of those over £100.

The government also announced that the £36 million generated through fines on banks after the Libor rigging scandal would be invested in Armed Forces charities and that accident and rescue charities would be able to recover VAT through a grant. This would lend accident charities the same rights as air ambulances and search-and-rescue charities.

What was not included?

As stated in our last news post about Insurance Premium Tax and how it affects charities, it was hoped that The Budget would exempt the charity sector from having to pay IPT at all. However, not only was there no reduction to IPT, the issue remained completely unaddressed.

Charity leaders were particularly disheartened about the lack of attention given to social and child care, which was said to be heading towards a “breaking point”. The Budget has been described by groups such as Acevo, Charity Finance Group and Oxfam as “backward looking” and “tepid”, in fact, most charity leaders do not seem thrilled with The Budget and don’t think it goes deep enough into the issues facing charities.

Growing concern for child and social care

Last year over 72,000 children in the UK were taken into care and 500 new child protection cases are launched every day, which has doubled in seven years. It is thought that the reason for the increase of children in care is largely down to cuts to council funding, which has meant a 40% reduction in resources that used to be used to intervene in child support. This has meant that councils have had to close their services in the last seven years, leaving the slack for charities to pick up. A £2 billion gap in funding between supply and demand is expected by 2020, so it is evident that the situation is critical and heading for “catastrophe”.

Anna Feuchtwang, chief executive of the National Children’s Bureau, said that The Budget "sends a clear message that if you aren’t a potential voter, the government won’t make your welfare a priority.”


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