Home Insights Budget comment – The Charitable sector

Budget comment – The Charitable sector

By Ensors Team
9th Mar 2017

The Chancellor’s Budget included very few specific references to the charity

and not for profit sector. Was that good or bad for the sector? Well clearly,

specific positive initiatives that would have made the position of charities

either financially or administratively easier would have been the ideal. But

equally, there is still something to be said for the status quo when the

alternative could have been to make things worse.

So, whilst there were no moves to reduce the burden of VAT by extending VAT

recovery for the not for profit sector, or to grant 100% mandatory business

rates relief for charities, what was in the Budget for the charitable


Firstly, one of the headline provisions was the Chancellor’s announcement

that there would be an additional £2bn of funding for adult social care spread

over the next three years. Whilst this funding is not specifically directed

towards charities, historically a proportion of adult social care has been

delivered by charitable organisations, so perhaps it isn’t unreasonable to

expect at least some of that money to filter its way into the hands of

charities. That said, many of these organisations have already suffered

significant cuts in funding over recent years and are also having to bear the

cost of the national living wage. But any additional funding must be helpful,

especially against a backdrop of increased demand.

On a smaller scale, the Chancellor has promised a further £20m to help combat

domestic violence and abuse over the life of this Parliament. Again this is only

relevant to certain charities, but nonetheless welcome. And another £12m of

funding from the ‘tampon tax’ will be made available to women’s charities more


More generally, whilst there was unfortunately no move to grant charities

mandatory 100% business rates relief, the sector should not be excluded from the

ability to benefit from the £300m of discretionary business rate relief which is

being granted to Local Authorities.