The Chancellor of the Exchequer’s announcement this week of the government’s budgetary plans for the next five years included a series of funding commitments for the charity and not-for-profit sector.
In addition the Spending review and autumn statement 2015 featured announcements relating to the Charity Commission and the Gift Aid Small Donations Scheme.
1. Overseas aid budget not cut
George Osborne has renewed the government’s commitment to spending 0.7% of the UK’s income on overseas development and aid.
Government spending will rise each year, reaching £16.3 billion by 2020. He’d previously committed £1 billion to be spent over the next five years on protecting “the national interest”, involving tackling the consequences of failed states such as Syria and Libya.
2. Elite sport supported
UK Sport will receive a 29% boost in funding over the next five years, benefiting Great Britain’s Olympic and Paralympic athletes.
Sport England will receive an increase of £2.6 million, a small drop in real terms, affecting grassroots sport.
3. DCMS funding cut by 5%
The Department for Culture, Media and Sport received a cut to its budget of 5%, and a cut to its administrative budget of 20%.
4. National museums to remain free
The Chancellor confirm that entrance to national museums will continue to be free of charge.
The Spending Review included announcements of grants to arts and culture organisations and projects:
• £150m for the British Museum, Science Museum and V&A
• £4m for Birmingham Dance Hub
• £5m for a South Asia gallery at Manchester Museum
• £500,000 for plans to celebrate the anniversary of the Mayflower
• £1m for Hull, the UK capital of culture in 2017, to create a legacy
• £15m for the Great Exhibition Legacy Fund
• £100m for Royal College of Art’s new Battersea campus
• £5m for the Great Exhibition of the North
• £9m a year for the Factory, Manchester’s new arts centre
However, local museums might not be so fortunate as they await the impact of the local authority settlements. Many local and region museums and galleries receive their funding from local government. Stephen Duechar, director of the Art Fund, said:
“It is the forthcoming local authority settlements that will determine the fate of the majority of the UK’s museums and galleries – the hundreds of institutions across the country are already under-resourced and vulnerable”.
Although cuts had been expected, Arts Council England funding will bring a small increase in cash terms of approximately £10m per annum for the four years up to 2019/20. In practice this means a 5% reduction in real terms.
Sir Peter Bazalgette, chair of ACE, said “this is an astonishing settlement for arts and culture”.
Sir John Tusa, former director of the Barbican Centre described the 5% cut as “a victory”, given that some had expected cuts of up to 20%. He described Osborne as a “Chancellor for the arts”.
George Osborne confirmed that he recognised the economic value of investing in the arts. He said it was “one of the best investments we can make as a nation”, arguing that return of a quarter of a trillion pounds on a £1 billion investment was “not a bad return”.
6. Cut in environmental funding
Many environmental charities and campaign groups were disappointed by the Autumn Statement., especially the change to the government’s energy efficiency programme.
Peter Smith of fuel poverty charity National Energy Action told The Guardian:
“Energy efficiency can reduce energy bills and keep vulnerable people out of hospital. This decision could lead to the NHS having to spend in excess of £22 billion to treat cold-related illnesses over the next 15 years”.
7. £15m to women’s charities
The Chancellor confirmed that current receipts from the ‘tampon tax’, a 5% VAT levy on sanitary products deemed ‘luxury’ items for women, will for a while be diverted to fund women’s health and support charities. This should generate £15 million a year for them.
Meanwhile, the government will attempt to change the EU rules that define sanitary products as luxury items in terms of VAT. The UK rate was reduced from 17.5% to 5% in 2000.
The Eve Appeal, the Haven, Women’s Aid and SafeLives will receive the first £5 million. “And I invite bids from other such good causes”, added the Chancellor.
A petition on Change.org to remove the tax secured over 270,000 signatures.
Osborne faced criticism that this workaround could be interpreted as implying that only women should have to pay to assist vulnerable women.
8. Bank fines
The government will grant £25 million of banking fines, levied for manipulating interest rates including LIBOR, to military charities and other good causes.
This includes:
• £2 million to help the Royal Marines Museum transfer to the Historic Dockyard in Portsmouth Naval Base.
• £4.7 million for Guide Dogs for Military Veterans
• £1 million to the Winston Churchill Memorial Trust
• £350,000 for the Hooton Park Trust to restore a WW1 aerodrome.
• Up to £1.5 million to match funds raised by the Independent and Evening Standard Christmas appeal for Great Ormond Street Charity.
Other announcements
Charity Commission
The Charity Commission’s income will be frozen at £20m for the duration of this Parliament.
Gift Aid Small Donations Scheme
As announced in 2014, the Government reaffirmed that it will review the Gift Aid Small Donations Scheme to ensure that it is operating as effectively as possible. It will publish a call for evidence in December 2015.
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