A View From the Turret – The Budget 2024
There were several key announcements within the budget which took place on the 30th of October 2024. Overall, it was characterised by increases in spending, taxation and borrowing, the largest recipients of increased funding being appeared to be the NHS and schools, although the detail is far from clear and we all need to see the Spending Review, due for publication in the spring of 2025. Some of the positive news includes:
- Increased local government funding: A 3.2% rise in core local government spending, with at least £600 million in new funding for social care.
- Support for individuals and carers: Reduce Universal Credit debt deductions (from 25% to 15%). Raise the weekly earnings limit on Carer’s Allowance. Conduct an independent review of Carer’s Allowance overpayments.
- SEND support: £1 billion (a 6% real-terms rise) to support children with special educational needs and disabilities (SEND).
- Funding for hardship support: £1 billion next year to extend the Household Support Fund and hardship payments.
- Education funding: An additional £30 million for free breakfast clubs.
- Funding for Holocaust education: An additional £2 million to support Holocaust education charities.
The less positive news for charities struggling on the precipice of sustainability is the 6.7% rise in the national living wage and the increase in employer National Insurance contributions (NICs) to 15%, both effective from 1 April 2025.
As NCVO remark:
While fair wages are essential, these rising costs will intensify the “triple squeeze” charities face from increasing costs, reduced funding, and higher demand.
Smaller charities may need to shift already limited resources away from essential services, putting the communities they support at risk.
Given this, it’s essential that VCSE organisations practice excellent housekeeping which includes ensuring that the projects they deliver make sense financially and are not loss leaders. In addition, every VCSE leader should be standing up and discussing non-inflationary contracts (usually provided by the Local Authority but not exhaustively) and detailing the extra costs that organisations must bear because of this budget.
Part of this is about a true and granular understanding of what works for your organisation and how much it costs. Once people know this, it’s easier to understand what you need when an offer comes your way.
Without it, you’re guessing and in this new world that’s a mistake that no VCSE organisation can afford to make.