Charities respond to the Autumn Statement 2022
On the 17 November, the government published the Autumn Statement 2022.
Our Chief Executive, Lisa Goodwin, said about the autumn statement: “It is a relief to see that benefits and pensions will increase almost at the rate of inflation 10.1% but the fact this will not happen until April is going to mean a horrendously difficult winter for people, and we already know that our voluntary sector is under a lot of pressure in terms of increased demand and picking up the pieces when people don’t have alternative support.
It is interesting that the Chancellor used the autumn statement to announce that Patricia Hewitt has been appointed to undertake a review of the role and powers of integrated care systems. There has been a lot of expectation for VCSE organisations to engage in shaping the emerging NHS ICS structures. At Connected Voice, we’ve been cautious about our level of involvement, because we have seen previous reorganisations become a drain on the limited time and resources we have. We hope that the progress made to date on ensuring primacy of place, and meaningful involvement of VCSE organisations will be recognised in the review.”
The headline figures in NAVCA’s report paint a bleak picture stating the UK is now in recession, household income will fall by 7% over the next two years, and pay is not expected to return to 2008 levels until 2027. It goes on to provide a detailed analysis of the taxation, benefits and spending before concluding: “Within the next two years there is likely to be large scale cuts to services provided by VCS organisations, charities and indeed local authorities, given that there is no new money in most sectors and inflation is continuing to erode the value of existing budgets.”
What do the changes mean for voluntary and community organisations?
CFG has published a detailed briefing of the autumn statement covering the potential impact on charities from a number of aspects including inflation, benefit changes, departmental spending, tax, local government, business rates, national minimum wage and energy support. We know from our own recent analysis of applications to the VCSE Cost of Living Crisis Fund that utility bills are a major concern for organisations, with some reporting increases as high as 350%. On 25 November, Civil Society Group, including NCVO and CFG, wrote to the Secretary of State to ask that charities struggling with their energy bills are included in support measures that replace the Energy Bill Relief Scheme beyond March 2023.
Analysis of the autumn budget from Civil Society, also highlights concerns that there was no mention of the Shared Prosperity Fund (SPF) which was created to replace the European Social Fund (ESF) after Brexit. They report that “in the spring statement this year, £400m was put aside for SPF in 2022-23, with the first payment to local authorities expected in October.” They go on to say “it is unclear whether underspend of £400m will be reclaimed by the government or necessitate further flexibility with the funds.”
Pro Bono Economics has produced a helpful outlook report for charities. Unsurprisingly, they anticipate “a grim winter ahead for charities serving the vulnerable”. Beyond April 2023 when benefits are set to increase, they predict that many households will still continue to struggle, as wages will not rise enough to keep up with prices and some people will lose their jobs. For charities, their analysis of new data from the OBR estimates that “charity income will rise by around £1bn in cash terms during 2023-24 (1.6%), but if costs rise in line with broader inflation then the real value of that income for the charity sector will decline by £2.2bn over that time period.” They expect a fall in donations and for volunteering rates to decline, as happened following the 2008 recession.
