What does the Budget mean for the Not for Profit sector?

As ever we take the opportunity to interpret what this years Budget means for the Not-for-Profit and charity sector.

The key points:

  • All schools in England are to become academies by 2022, creating exempt charities which are governed by boards of trustees/governors and report direct to the DFE. Whilst the majority of academies’ income comes from the DFE, they are allowed to seek additional grant funding for charitable trusts and such like. Will there be more competition and increased demand for the available grants currently being accessed by other charities in the sector?
  • Spending cuts of about £4bn by 2020 – will this place further pressure on Local Authority budgets and in turn see charities who rely on LA funding placed under additional pressure?
  • Unemployment rates reduced, and employment numbers at their highest ever. It will remain to be seen whether the pressure placed on charities providing hardship funding and support will stabilise or reduce. Austerity measures continue and it is very likely that charities providing these services will increasingly be needed in the future.
  • Cuts to personal disability funding announced will undoubtedly place more people in need of the support of the charity sector.
  • The small business rates relief rises to £15,000. Whereas charities would receive an 80% reduction from the local council with the remaining 20% being voluntary, hopefully the rates relief will ensure that 100% relief is given all of the time.
  • Charities investing into a commercial property will benefit from the stamp duty amendments coming into effect from midnight tonight.
  • The increase in the personal tax fee allowance to £11,500 from April 2017 will see more people drop out of paying tax, which could impact on a charity’s ability to recover Gift Aid on donations they make.

So whilst there are some small positives for the Not-for-Profit and charity sector, the overriding message is not wholly optimistic.   With further spending cuts and continued austerity, together with the uncertainty over the EU referendum we suspect that sector is in for a rough ride.

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