Ahead of the 2014 Budget on 19 March ACEVO has submitted
its ideas and suggestions to the Treasury. Naturally I accompanied the submission
with a letter to George Osborne to put our case personally. With the economy on
the mend, it's time to look at ways in which we ensure a recovery that is fair
to all, as indeed both the Government and Opposition have said they need to
We highlighted a number of ideas, such as ring-fencing a
pot of funding to develop Youth Employment Partnerships, as I blogged about
yesterday. This builds on the recommendations of ACEVO’s 2011 David
Miliband-led commission into youth unemployment.
We also call for the creation of an NHS Investment
Initiative fund, to give new providers from the charity and social enterprise
sectors access to capital when devising new forms of care, hence accelerating
the transition to preventative models of care and support.
A further proposal was for the creation of a new
Community Recovery Fund, to support the growth and development of voluntary
organisations that want to expand their work with local government and reduce
demand on state services. It's comparable not only to the Transition Fund from
2010, but also in many respects the recently-announced Business Support Scheme
for SMEs damaged by the floods.
Encouragingly, the idea has already generated real
interest in Government. I'm hopeful. Watch this space...
And here's my letter to the Chancellor in full:
We very much
welcome the news that the UK economy has begun to pick up, and that as a nation
we are on a more optimistic course. I am writing to ask you to ensure that, as
we negotiate the road back to prosperity, your forthcoming budget announcement
ensures that the proceeds of a new era of growth are shared equitably.
As you will be
aware, ACEVO members – charity and social enterprise leaders working with some
of the most vulnerable people in some of our most marginalized communities –
are still experiencing a relentless upturn in the demand for their services.
When setting your priorities for the 2014 budget, I ask you to ensure that
social justice is at the heart of your proposals, and that the voluntary sector
is properly supported to meet this demand.
Recovery Fund and Social Investment
infrastructure needs a sustainable funding plan if we are to meet the needs of
the future. We have been impressed by initiatives such as the Commissioning
Academy, which supports effective public sector working with the sector, and
the Investment and Contract Readiness Fund, which supports charities and social
enterprises to grow. The Government’s support for social investment, such as
the roadmap for a Social Investment Tax Relief outlined in the last Autumn
Statement, is helping the UK to lead the world in this field.
But we must not
rest there. Social investment in particular is a young market. The vast
majority of social investment funding does not go to grass roots charities and
social enterprises. Indeed, risk aversion on the part of investors means this
need may remain unfulfilled, despite the efforts of Government-backed Big
We have noted many
cases in which social investment has gone to organisations that could as easily
have procured investment from commercial sources. Social impact bonds, while
innovative, remain some years from going mainstream. Our communities will not
wait for the market to rectify itself and neither should the Government.
I urge you to
ensure that sufficient short-term funding is allocated to buttress our nation’s
social infrastructure. We recommend that the funding allocated to the Cabinet
Office’s highly successful Investment and Contract Readiness Fund be doubled.
This fund has already proven its worth with voluntary sector organisations
stepping forward to offer citizens a real choice in the provision of services
We also recommend
that a new Community Recovery Fund be created to support the growth and
development of voluntary organisations working alongside local government, in
local communities. These organisations do crucial community work that reduces
the demand for state services. This fund would perform a similar function to
the much-needed Transition Fund you granted in 2010. It would provide a source
of investment for struggling voluntary organisations, many of which have been
seriously affected by local spending cuts.
During the recent
the winter storms ACEVO members such as the British Red Cross have provided
crucial assistance. We welcome the Prime Minister announcing a £10 million
Business Support Scheme, which will help small and medium sized businesses with
the clean-up effort. Charities and social enterprise are stepping up to assist
local communities with the response and recovery, and the Community Recovery
Fund offers the ideal vehicle to support those efforts.
2. The prevention
and early intervention agenda: NHS Investment Initiative
The Government must
maintain its momentum on the crucial issue of public service reform. In
previous budgets, you have rightly identified early intervention as a conduit
to smarter, more effective public services. You included measures to support
early intervention in your previous budgets. We welcomed the inauguration of
the early intervention foundation and the help for pre-schoolers you offered in
your previous Autumn Statement.
However the really
big savings and radical thinking are to be found in healthcare. It is time to
apply early intervention principles to this area of expenditure. Long-term
demographic and financial pressures require new approaches to the provision of
care and support. With rising life expectancy and the increasing prevalence of
long-term health conditions and complex needs, the health and care system must
get better at providing home and community-based support for people to stay
healthy, well and out of hospital. When over 40% of adults now live with a
long-term illness, we need alternative methods of support to the traditional
model of reactive care provided primarily in acute settings.
ACEVO explored this
issue in The Prevention Revolution, the report of the 2013 ACEVO Prevention
Taskforce (chaired by Sir Hugh Taylor), which examined the barriers to the
growth of preventive health and care services and recommended ways to overcome
It is clear that we
need to invest smartly in the NHS so as to privilege innovation and make
savings in the long term. We recommended the creation of an NHS Investment
Initiative to fund the development of innovative new forms of provision,
provide access to capital for new, innovative providers from the charity and
social enterprise sectors and accelerate the transition to preventative models
of care and support. The time is right for this investment initiative, which
will combine the best of financial innovation with the best of public service,
and we call on the Treasury to work with the Department of Health, NHS England
and other relevant stakeholders to inaugurate this smart intervention in our
The Government has
announced its welcome ambition for joined-up health and care to be the norm by
2015 and you announced funding for pooled budgets in your last Autumn
Statement. We recommend that you accelerate this transformation, and to fund a
new tranche of local pooled budget pilots to bring together NHS commissioners
and social care commissioners alongside councillors at the local level. These
local health innovation funds, recommended by both the ACEVO Prevention
Taskforce and the Association of Directors of Adult Social Services (ADASS),
would support both clinical commissioning groups and local authorities to
invest in services that shift care and treatment from acute to community-based
settings. This is the future of better healthcare, driven by a prevention and
early intervention agenda and smart financing.
3. Tackling youth
unemployment: funding for local youth employment partnerships
We welcome the
first recorded fall in UK youth unemployment for several years, in late 2013
and early 2014. However, as you will be aware, there remains a structural youth
unemployment problem in the UK, with around 7-9% of young people becoming NEET
(Not in Employment, Education or Training) after the age of 16, even in times
of economic growth, with large negative effects on our economy. As ACEVO’s 2011
Youth Unemployment Commission showed in its report, this carries a significant
cost, estimated to be £4.8 billion in 2012, with a further £10.7 billion cost
to the economy in lost output.
It is clear that
the Government takes this issue seriously and has accepted the Commission’s
case that there is strong economic and fiscal case, as well as a social case, for
further investment in interventions to support young people into sustainable
employment. There have been some promising steps in this area, such as the
creation of the £1 billion Youth Contract, but there is still a long way to go.
In particular, there is a need for more intensive support for those young
people at greatest risk of becoming NEET post-16, who currently face a shortage
of high-quality progression options.
The ACEVO Youth
Unemployment Commission proposed an intensive Job Ready Programme aimed at
reducing the proportion of school leavers who go on to become long-term NEET,
to help fill this gap. These would be locally commissioned by a range of local
partners involved in NEET prevention, and delivered by local provider
organisations through an outcomes-based funding system: a Youth Employment
Partnership. The Treasury has a direct interest in developing these proposals
and ensuring they are properly funded. We recommend a ring-fenced pot of
funding to develop Youth Employment Partnerships that support the most at-risk
young people into employment.
4. Recognising and
supporting the voluntary sector as an economic and social contributor
In last year’s
Autumn Statement you announced an additional £1 billion of capital to support
SMEs. Through the British Business Bank, these programmes invest in late-stage
venture capital funds, loan guarantees and targeted schemes such as lease and
asset finance. We support these welcome measures to boost Britain’s business.
However, we are concerned that your analysis puts less emphasis on the benefits
to the UK of a flourishing, growing voluntary, community and social enterprise
sector. Research from the LSE and the Social Economy Alliance among others,
showing that social enterprises in particular have outperformed comparably
sized businesses since 2008, suggests this represents an opportunity missed.
We call on you,
alongside your offer to Small Businesses (Small Business, GREAT ambition 2013)
to make a similar commitment to voluntary sector and social enterprise growth
that goes beyond the social investment tax relief: a belt-and-braces offer that
supports our sector’s infrastructure and aspirations. We are happy to continue
working with the Government on such an initiative and we will outline our own
programme of reform in our manifesto for the voluntary sector in advance of the
2015 general election.
As you sit down to
write the budget and pore over the red book, I urge you to consider the
voluntary and social enterprise sector across every part of your economic plan.
It is right that the UK has a National Infrastructure Plan, but it must also
track its impact on community organisations, who both use national
infrastructure and who increasingly provide it through, for example, energy cooperatives.
At the Autumn Statement 2013 you announced that resources under the strategic
influence of LEPs would be at least £20 billion to 2021. We welcome this
commitment to greater localisation but urge you not to wash your hands of this
funding. Without a strong steer from the centre, very little will end up in our
most marginalized communities where voluntary sector organisations can make
sector has a combined income of £38.3 billion and an expenditure of £36.8
billion. Charities employ nearly 750,000 people and more than 20 million people
volunteer each year. We are a growing, vibrant, confident sector, and an
integral part of rather than an adjunct to national growth. I suggest that if
you are looking for growth at the grass roots, at the local as well as the
national level, in the places that directly reach people’s lives, you will
recognise, support and work in partnership with the voluntary and community
sector. I hope you agree.
Sir Stephen Bubb