Charities could share in £2billion boost to social care funding

Published on 8 March 2017

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A search for the words “charity” or “charities” in the Spring Budget report returns just three hits, all in relation to the Tampon Tax Fund for women’s charities – very relevant as the speech was delivered on International Women’s Day. Such charities will benefit by £12million as part of the 2016/17 round of this fund.

However, charities are definitely affected by more of the Budget report than this. The other major announcements that may impact on charities include:

  • An additional £2billion to local authorities over the next three years to be spent on adult social care services. £1billion will be made available during 2017/18. It is not clear how much of this money will reach social care providers but it appears that this announcement is good news for the charitable sector.
  • Following the business rate revaluation, the Chancellor announced measures to help businesses that will be adversely affected. One of these measures is that local authorities will receive £300million to increase their discretionary relief offering to needy causes. Hopefully some of this will reach the charitable sector but charities will, of course, be in competition with private businesses for this relief.
  • Additional funding of £500million per year will be available for the education of 16 to 19 year olds. Colleges have the opportunity to provide new T levels.
  • £20million has been promised to organisations who work to combat domestic abuse.

Some sector figures are disappointed by the lack of support for the sector but others are grateful for the stability that will follow the Budget. The fact that insurance premium tax was not increased was particularly welcomed by the sector.

We already knew that the National Living Wage would increase to £7.50 in April. Despite being a policy that is generally welcomed by the charity sector, it is estimated that the cost to this sector will be around £500million by 2020.

One other point not directly related to the Budget is an increase in probate fees that was announced last week. There is a current flat fee of £215 but this will be replaced by a sliding scale in May 2017. The lowest fee will be £300 but the largest estates (over £2million) will be hit by a fee of £20,000. This will have a significant impact on charities where they are residuary beneficiaries.

Overall, the Budget has once again largely ignored the charitable sector. With inflation set to increase to 2.4% in 2017 and 2.3% in 2018, charities will face added challenges when trying to balance their books.

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