What would the end of austerity look like?
Even setting Brexit aside, the pressures and expectations on this Budget are particularly high. Areas like health, housing and social care have serious funding shortcomings and need policy reform. Any announcements about health and social care will surely grab the headlines, but it could be argued that austerity hasn’t truly ended until local authority finance is put on a more stable footing, or the squeeze on benefits is slowed or reversed. Against the backdrop of these pressures, can charities expect the Chancellor Phillip Hammond to build on the vision of the new Civil Society Strategy and announce some changes to support the charity sector? Or is that wishful thinking?
We need some news on the second tranche of dormant assets
Umbrella bodies and charity leaders have already called for Hammond to take substantive action to make sure the next tranche of up to £2bn dormant assets are used as strategic long-term investments into the sector. A longstanding sector proposal would use these assets to endow Community Foundations, to give communities additional local grant-making capacity. Investing £1bn could generate £40m per year in perpetuity. There is also a proposal to use dormant assets together with private sector resources to build up a Community Wealth Fund that could grow up to £5bn. The main message for Treasury is: there is no lack of good ideas, but it needs dedicated consideration in government to get things off the ground, as this will be a long-term project.
The future of EU funding must include the sector
When the UK leaves the EU, access to its funding streams will eventually cease (the timing will depend on the deal agreed). A year ago, we published research on how much UK-based charities receive in EU funding. The baseline figure is £258m (a conservative estimate). Government has committed to a UK Shared Prosperity Fund (UKSPF) to replace these EU funds, with the broad objective to boost productivity and inclusive growth. The sector has been expecting a consultation on the design of the Fund for some time. The Joseph Rowntree Foundation has put forward design principles for the UKSPF. Any new arrangement clearly needs to take on board the expertise and capacity of the local charity sector, and go beyond economic considerations to include social ones. Will the Budget give us any clues?
Invest in institutions that support the sector
The Charity Commission has seen its budget slashed from £40m to around £21m in recent years. £5m in additional funding was made available at the end of 2017, but we still don’t know whether this increase is permanent. There is an ongoing debate about charging charities to plug the gap – which DSC opposes – we’ll be eagle-eyed for any announcements in the Budget around a consultation on charging. If HM Treasury is asking itself about what it can do to promote the role of civil society across government, they could support a new funding settlement for the government body that is so critical to supporting it.
Sort out Universal Credit to stop people suffering and getting into debt
Universal Credit is a mammoth project affecting over 3 million people. Serious problems with the rollout of the programme have increased the hardship of the most vulnerable. The Trussell Trust has monitored the rollout of the scheme in pilot areas and has found clear links between Universal Credit, financial hardship, and foodbank use. Women’s Aid has been warning for a while that Universal Credit was not designed with survivors’ safety in mind and risks making domestic abuse worse for them. There should be something about Universal Credit in the budget – potentially more money or policy reform – many in the sector will be scrutinising the Budget for any news.
Social care – progress or more procrastination?
Serious social care reform has constantly been kicked into the long grass. In the absence of government action, others have stepped into the gap. For example, the House of Lord’s Economic Affairs Committee launched its inquiry into social care funding in England. The Local Government Association has launched its own green paper on adult social in the absence of the official one from government. It’s worth noting that Brexit could also increase pressure on the social care workforce. Nearly half of the 31,000 EU charity workers are in the social care sector. Brexit-related restrictions to EU migration, combined with EU nationals leaving the UK, could cause shifts in the workforce, increasing the existing skills shortage that affect charities. Surely the Budget must at least mention it?
The ‘biggie’ – local government funding and commissioning reform
Local government is in desperate need of a new funding settlement. The LGA reports that between 2010 and 2020 councils will have lost 60p out of every £1 the Government had provided for services. Rising pressures on services will leave them short of £3.9bn in the next year. Lloyds Bank Foundation found that funding for services is increasingly addressing crisis not prevention. And almost all of the austerity-induced funding reductions in government spending on disadvantage occurred in the most deprived local authorities. Charities and charity beneficiaries are affected by this as they deal with the fallout from failing or axed council provision.
Will we see the end of austerity?
Even apart from the uncertainty around Brexit, the country faces serious challenges. The charity sector, as ever, will be at the forefront of meeting these, with or without state support – but will it be enough? The sector can’t and arguably shouldn’t be taking up the slack for state services under pressure. The sector is putting forward many proposals for reform that could help communities to be more resilient – we need the Chancellor to send a signal that these concerns and solutions are at the heart of government’s thinking, not an afterthought.