Where will the cuts fall?

Yesterday’s Autumn Statement has completely dominated today’s news. Not a surprise.

But what is unclear about yesterday's Statement from the Chancellor is where cuts will be made in public spending after 2015. This morning’s FT makes clear that “renewed activity is failing to fill the Treasury’s coffers.” The situation is dismal: we have a surprising shortfall in future tax revenues, and the chancellor still aims to cut down the size of the public sector.

So cuts will continue, with few big tax rises in the offing. The BBC's head of statistics Anthony Reuben said public spending as a proportion of GDP would fall to its lowest level since the 1930s. Office for Budget Responsibility chairman Robert Chote called it a “very sharp squeeze”, of which around 60% is forecast to come in the next Parliament.

These cuts will have a profound effect on society, particularly the most vulnerable like the unemployed and people with disabilities. That in turn puts pressure on the third sector.

So what does this mean for us?  There are 2 major effects. First, with spending protected in health and schools the brunt will fall on welfare and local councils. This will inevitably mean further cuts to support for charities, especially at local level. It also means further strains on the welfare system , with charities having to pick up the pieces. Increasingly, as ACEVO points out in our recently published ‘Free Society’ Manifesto, our sector has become ‘the other safety net’ for people and communities. But you can't  increase your support for the vulnerable with less money. The system is already creaking and in desperate need of funding, as food banks and many disability charities will tell you.

We urgently need to know exactly where cuts will fall, and how the Government plans to protect the third sector. It’s not enough to delay the details until closer to the election, or even after next May. For now, we know the third sector will always be there in support and in defence of society’s most vulnerable. But without a modicum of political support, this situation cannot last for ever.

George Osborne bearing gifts?

Well, there not much about the Autumn Statement that had not already been announced. Underlying the Statement is the fact that over the next Parliament we face more massive retrenchment of public spending, against a darkening fundraising environment. Yes there are opportunities, but the money continues to be tight. And getting tighter.

The Chancellor has made some promising noises but he is guilty of one fatal error. He neglects the vital role of the third sector to building a healthy society and economy. His announcements on national infrastructure said nothing about local, community or third sector infrastructure. In his drive for a budget surplus, we are concerned that he will jeopardise already-decimated local services further. This will harm not only our nation’s sense of togetherness but our economic productivity as well.

As we stated in our 2015 General Election Manifesto, ‘Free Society’, charities are the nation’s ‘other social safety net’. The next government must recognise us as key allies in reform, not as an afterthought.

I’m delighted with the VAT announcement. I have been arguing this case for yonks, along with ACEVO’s membership and much of the rest of the sector, so we welcome the promise to refund VAT on hospices, search and rescue and air ambulance organisations. We argued for this in our submissions to the Department of Health, and it is good to see the Chancellor is listening. If the Government is serious about giving us the NHS we deserve, it has to offer patients the choice of being looked after in their community, whatever stage of life they are at.

I’m also pleased that the Chancellor agrees that fines from crooked banks should continue to go to society. ACEVO articulated that principle in our ‘Free Society’ manifesto and we are pleased that the Chancellor agrees. We believe he should go further; the shame to our nation caused by these fraudulent acts should be washed away with good.

Charities give so much to the high street each and every day. The Government needs to support the work they do to make our public spaces that much more giving and caring. Charity leaders must play a central part of this review. You can be sure I will be robust in making this case as this debate unfolds. We will not allow changes in business rates to affect the charity shop. I’m a fan. They touch our reliefs at their peril!