Emergency Budget 2010 – What It Means For The Community Sector

Sector umbrella bodies respond to the Emergency Budget of 2010.

The announcement of George Osborne’s Emergency Budget has led to concern among leading sector umbrella bodies.

The budget includes plans to:

• Increase VAT from 17.5 to 20 per cent which is likely to lead to a rise in demand for charities’ services as access to welfare benefits are tightened and unemployment rises.

• Cut 25% from Government departments across the board, with the exception of health and aid spending.

• Cut the welfare budget by £11 billion.

• 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.

• Review the current National Lottery taxation arrangements.

Neil Cleeveley, director of policy and communications at NAVCA, said the government needed to provide more information on their ideas for the Big Society:

“This is further evidence of just how tough public spending cuts are going to be. That’s why we need to know the government’s plans for the big society.

“We need to know that local charities and community groups will get the support they need to help communities through these hard times.”

ACEVO chief executive Stephen Bubb agreed that any plans for the Big Society must be as a result of consultation with the sector and showed concern about the rise in VAT:

“The scale of the challenge facing charities as a result of this Budget is enormous. The spending cuts outlined today will impact on frontline services. The vulnerable will likely receive less support, charities will be asked to do more, and will have to do so at a time that their cost base is rising due to the VAT rise.

“The Government has made clear that as it rolls back the state it wants a Big Society to flourish in response. If this is to happen, it is crucial that now the state works with us in genuine partnership, that we are fully engaged in the Spending Review and that it is not a PR process as some Conservatives have suggested.”

The rise in VAT was a concern also for the Charity Tax Group (CTG) who warned that the increase could cost charities £150 million a year.

Helen Donoghue of the CTG said:

“We fully understand the Government’s urgent need to tackle the deficit through spending cuts and tax increases.

“But it has also emphasised the need for fairness and protection for the least well off and, as our research has shown, the impact of this VAT increase will have a detrimental and disproportionate effect on the charity sector.”

The social enterprise sector said the budget lacked detail on the Big Society and did not offer anything directly to social enterprises.

Investment executive at Local Partnerships, Dan Gregory, said:

“If the big society is to mean anything in practice, and not just as a cover story for cuts, then the big spending departments and local authorities will have to take it seriously.”

“A handful of speeches and initiatives emerging from the Cabinet Office, communities or treasury departments will not make the big society, but we haven’t seen any evidence of either in this budget.”

“What is clear, however, is that the days of government throwing another fish over the side to social enterprises a couple of times a year have gone.”

To view the full budget document click here (opens in new window).

HM Treasury, 25/06/2010

Changes to Big Lottery Giving Receive Mixed Reception From Third Sector

The Big Lottery Fund (BLF) has unveiled its new funding strategy for the next six years.

Following on from the Big Thinking consultation in the Autumn of 2008, which asked stakeholders and the general public how they thought the Big Lottery budget should be spent, the BLF has announced its new funding strategy.   The strategy includes an extra £45 million to help charities hard-hit by the recession and a pledge to give at least 80% of its money to voluntary and community organisations.

The £45 million recession package will be distributed this financial year and will include cash injections for existing funding programmes such as the Reaching Communities scheme, Basis and Awards for All.  

In addition to extra money being made available, the BLF have also outlined new priorities and directions for their grant-making, with projects that reduce isolation and promote community cohesion and front-line services, now at the very top of their agenda.

Voluntary sector leaders have given the new funding strategy a mixed reception.  Ralph Michell, head of policy at Acevo, welcomed the changes and the extra money claiming, “The sector is going through a difficult time and needs all the help it can get”.  Navca’s Kevin Curley and NCVO’s Stuart Etherington, however, were less impressed and urged the BLF to increase its grant-making to voluntary organisations to 100%, citing the current economic climate, which has led to the slashing of available local authority grants and the creation of a difficult environment in which to fundraise, as a key motivation for such action.

Source: Big Lottery Fund

New Cabinet Committee For Third Sector

A new Cabinet sub-committee to tackle barriers to service delivery has been welcomed by the third sector.

The Office of the Third Sector (OTS) has invited representatives from eight Whitehall departments including the Department for Work and Pensions and the Department for Communities and Local Government to join forces with an advisory group of third sector representatives to form a new sub-committee.

The committee has been tasked with removing barriers faced by third sector organisations attempting to win central government public service delivery contracts and will carefully scrutinise the procurement procedures of a range of government departments in order to make them more effective and accessible.

The announcement of the sub-committee has been well received by the third sector.  Peter Kyle, deputy chief executive of Acevo, commented that the creation of the advisory body was a “triumph” and suggested it would have “real clout”.  Ben Kernigham, deputy chief executive of NCVO, also welcomed the committee, but urged them to take relevant and decisive action quickly:

“Voluntary sector organisations have already identified the barriers to their involvement in public service delivery.  We now need the committee to tackle these issues and take appropriate action.”

For further information visit the Office of the Third Sector (OTS) website: http://www.cabinetoffice.gov.uk/third_sector.aspx

Source: Cabinet Office

New Third Sector Minister appointed

The former parliamentary private sectary to Gordon Brown, Angela Evans Smith, has been announced as the new Minister for the Third Sector in the latest cabinet reshuffle.

Smith, MP for Basildon and former member of the Department for Communities and Local Government (DCLG), will replace previous minister, Kevin Brennan, who is set to join the new Department for Business, Innovation and Skills, headed by Peter Mandelson.

A prominent and active supporter of charities, Smith is a patron of a number of organisations, including the Captive Animals Protection Society, the Burned Children’s Club and Basildon Women’s Refuge, and cites a range of causes including animal welfare, child protection, employment, youth issues and employment as key personal interests.

Pledging to continue to promote and recognise the “vital role” of the Third Sector in today’s society, Smith said:

“As a Government we need to ensure that the right advice, support and financing is available […].  I will drive forward the Government’s support for a thriving third sector and champion the innovative and dedicated work of those of you who serve in the sector.”

Third Sector members have warmly welcomed Smith’s appointment, with Acevo chief executive, Stephen Bubb, claiming it marked a “promotion for the sector”. 

Communities Secretary, Hazel Blears, was also replaced last week following her resignation from the Department for Communities and Local Government (DCLG).  She will be succeeded by the former secretary of state for Innovation, Universities and Skills, John Denham.

Source: Cabinet Office

Acevo website to bolster third sector during recession

Chief executive umbrella body, Acevo, have launched a new website that is specifically targeted at helping the third sector weather the current economic storm.

The easy to use site includes recession news, expert guides on everything from mergers to EU funding, information on relevant events and courses and handy links to useful organisations.

Visit today at: http://www.recessionsupport.org.uk/main/

Source: Acevo

Third Sector to stick together to beat the crunch…

Acevo chief executive, Stephen Bubb, has this week urged Third Sector organisations to stick together during the current economic crisis and warned they need to be prepared to try out new approaches.

 

According to Bubb, speaking at the Charities Aid Foundation’s Funding the Future Conference, Third Sector groups should be looking to form alliances with other similar charities, voluntary groups and social enterprises if they want to survive the next few years.

 

Bubb flagged up the Disasters Emergency Committee, an umbrella group comprising 13 UK charities who work in humanitarian and emergency aid, as a model of best practice, claiming whenever an international crisis occurs they work together effectively.

 

With the recession undeniably shaping up to be an international crisis – it’s time for the Third Sector to work together too…

 

Source: Acevo

Three-way merger proposed by Third Sector

Chief executives of Third Sector support agencies are this week calling for a merger between big-hitting funders Capacitybuilders, Futurebuilders and the Big Lottery Fund (BLF), in order to create a new independent, non-departmental public body for delivering loans and grants.

 

These calls come after claims made by David Blunkett in his recent Third Sector report that the BLF should be protected at all costs. 

 

Stuart Etherington, NCVO chief executive, claimed the proposed three-way merger would go one better than simply securing the future of the BLF.  Acevo chief executive, Stephen Bubb, called the suggestion a “great advance” that will undoubtedly cut bureaucracy and make grant applications infinitely simpler. 

 

Source NCVO

Charity losses revealed…

Third sector umbrella bodies NCVO, Acevo, the Charities Aid Foundation, the Charity Finance Directors’ Group and the Charity Commission, have this week released figures they gathered in their September survey detailing charity losses in the Icelandic bank collapse.

 

The survey results, released following a consultation with government ministers, suggest that charities have lost between £86.6 and £200 million in the recent Icelandic banking troubles.

 

Sector representatives present at the consultation urged the government to act quickly and suggested the implementation of a loan guarantee scheme for charities that have lost money.

 

Source: Acevo

Blears announces new Empowerment Fund

This week Communities secretary Hazel Blears, speaking at the Acevo conference, invited applications to the eagerly anticipated £7.5 million Empowerment Fund.

 

It has been claimed that the Fund, intended to offer support to charities, community and voluntary groups and social enterprises across England, will play a vital role in helping local communities and the third sector to weather the credit crunch storm. 

 

The programme will fund organisations that work with local people to “empower communities” and “drive change”.  Activities eligible for support include community involvement in planning, the promotion of community leadership and the development of social enterprises.  The Fund, in line with the aims and objectives of the government’s Communities in Control campaign, will give real people a voice and will ask them to have their say on local services such as libraries and local amenities such as town halls.

 

The Empowerment Fund will run from 2009 – 2012 and will support approximately 25 – 30 organisations with grants of between £250,000 – £500,000 over three years.

 

For further information on eligibility criteria and the selection process, visit:

 

 http://www.communities.gov.uk/communities/thirdsector/

 

Source: Communities and Local Government

Third Sector bodies keep losses secret

Following their meeting with third sector minister Kevin Brennan this week, chief executives from umbrella bodies NCVO, Acevo, the Charity Finance Director’s Group and the Charities Aid Foundation have announced they will not make public the figures they have gathered in relation to the amount of charity money lost in the Icelandic bank collapse.

 

Ralph Michell, Acevo’s policy advocate, yesterday commented that the meeting with Government had been “constructive” and revealed it is hoped that the third sector minister will, “come back with an answer in the near future”.

 

Source: Third Sector