Spring Statement lifeline for voluntary organisations, but will it be enough?

Another day, another budget, at least that’s how I felt on Wednesday morning as I prepared for the Spring Statement.  

Yet, despite a glut of fiscal events over the last few months, the last UK Budget took place in October 2021, 500 days before our new Chancellor, Jeremy Hunt MP, stepped out with the familiar red box. 

The cost-of-living crisis we are now all so familiar with also began to take hold later that year. 

Since then, pressure on voluntary organisations, our workforce, volunteers, and the people and communities we work with, has steadily intensified. Could the Chancellor offer the much-needed lifeline? 

Much to my surprise, yes. In the first few minutes the Chancellor proclaimed that he had: 

"Heard from the Charities Minister and his Secretary of State about the brilliant work third sector organisations are doing to help people struggling in tough times. They can also help people in need that central and local Government cannot, so I will give his department £100 million to support thousands of local charities and community organisations to do their fantastic work."  

Finally, recognition and support for a sector that is so central to society and the economy, yet is so often unnoticed and underappreciated.  

We now know that this £100 million will: 

• Provide support to charities and community organisations in England (with Barnett consequentials expected for Scotland).

• Three quarters will be grants in 23/24, targeted at frontline charities and community organisations most affected by increased demand and delivery costs.  
• The remaining quarter will be used over the next two years to increase the energy efficiency and sustainability of voluntary, community, and social enterprise (VCSE) organisations, such as new boilers, heat pumps, and insulation. 
• An additional £20 million from the Dormant Assets Scheme announced earlier this month, will also support the sector’s long-term energy and financial resilience and the Government’s commitment to net zero target by 2050. 

There are many questions still to be answered:  

Which organisations will qualify?  

What will the Barnett consequentials be?  

Will consequentials be passed on in full by Scottish Government?  

And, perhaps most pressing, will it be enough?  

To this last question, the short answer, is no. 

Based on the Office of Budget Responsibility (OBR) forecasts, Pro Bono Economics, estimates the charity sector will experience a real-terms income drop of £800 million between 2022/23 and 2023/24. In Scotland alone, 93% of organisations reported rising costs at the end of 2022, with almost half reporting that rising costs are having a negative effect on their ability to deliver their services. 

While the £100 million announced by the Chancellor is the most significant commitment to the sector since the government’s emergency Covid package in 2020, it won’t meet the scale of the challenge.  

The Budget could have gone further.  

Many of the five asks of the Civil Society Group, of which SCVO is a member, remain unfilled. 

Similarly, an opportunity to offer certainty to voluntary organisations and local authorities by committing to a further five years of Levelling Up funding was not realised. 

A call to action on the long-awaited review of the Approved Mileage Allowance Payment (AMAP), a bureaucratic barrier to fair and full reimbursement of expenses for staff and volunteers, was also ignored. 

There was, however, some good news for volunteering. Volunteer Scotland cautiously welcomed plans to abolish work capability assessments. A lack of clarity from the Department for Work and Pensions on the impact of volunteering on work capability assessment outcomes has consistently been a barrier to volunteering.   

At a Scottish Government level, there will be decisions to made about how to allocate the £320 million of Barnett consequentials expected for Scotland as a result of decisions made in this UK Budget. SCVO has already called on the Scottish Government to follow the Chancellor in supporting the sector by ensuring that voluntary organisations in Scotland benefit from the full Barnett consequentials of the £100 million sector support package. 

Overall, there is no doubt that the Spring Statement offered the voluntary sector a much-needed lifeline. However, with the OBR predicting living standards will fall by 6% over this fiscal year, and energy prices available to charities remaining 4.5 times higher than in February 2021, the voluntary sector will remain under pressure for the foreseeable future. 

If organisations are to keep the lights on, meet demand, support volunteers, uplift wages, and deliver quality outcomes, this lifeline needs to be the start of an ongoing conversation about how to support our sector’s vital social and economic contribution. 

Read our Spring Statement response.

Read the Spring Statement Briefing from SCVO and Volunteer Scotland.