‘The era of austerity is finally coming to an end’. Really?

In his first Autumn Budget, Chancellor Philip Hammond claimed his party’s management of the public finances was working and would allow future investment in public services – hinting at a reversal of the spending cuts to government departments that have been the norm since 2010, and a new approach from 2019. But with Brexit in the way, does it add up? 

Significantly, the Budget didn’t provide many answers on the urgent question of local authority finance – any big reform will have to wait until next year at least, and potentially after the Brexit issue is more settled. In the meantime, many services are under huge pressure, with demand spilling over onto charity services and beneficiaries.

Hammond addressed the social care crisis hitting local government and the health service with a range of funding streams amounting to nearly £1bn into 2019, but many analysts will consider this far below what is required even in the short term. The Chancellor also said the government would ‘shortly’ publish a Green Paper on social care – but virtually the same promise was made this time last year. Without sorting out both, claims about the end of austerity still ring hollow for many. 

On the other hand, the Chancellor did make significant (and anticipated) announcements about Universal Credit, which many charities (including food banks like the Trussell Trust) have criticised. Calling it a ‘major structural reform to our economy that will help drive growth in the years ahead’, he announced an additional £1bn over five years to support ‘additional protections’ as people move to Universal Credit, as well as policy changes that would cost another £1.7bn, intended to benefit 2.4m working families with children and people with disabilities. He said further detailed measures from the Department for Work and Pensions would be forthcoming – whether this is enough to fix the problems will surely depend on those.

Hammond also re-announced the Government’s already trumpeted real terms £20.5bn increase for NHS spending over the next five years. He said the NHS will need to produce a 10-year plan, to be ‘published shortly’, and announced that there would be a new mental health crisis service, with comprehensive support available in all A&Es, enhanced support for children and young people, and a crisis hotline. 

For charities specifically, there were some familiar giveaways for charities involving people in uniform, such as £10m for Air Ambulances, and £10m to benefit Armed Forces Charities in the centenary year of the armistice at the end of the First World War. There were also some technical, tax-related measures around charity trading and Gift Aid. However, many other policy areas important to many charities, such as a planned UK Shared Prosperity Fund (to replace EU funding streams after Brexit), and the future of the Charity Commission’s budget, got no mention.

Commenting on the Chancellor’s statement, DSC’s Director of Policy and Research Jay Kennedy said: ‘Despite new measures on Universal Credit and another social care funding stop gap, the claim of the end of austerity rings hollow. The Chancellor made big statements about mental health provision that many charities will want to unpack, because they’ve heard similar things many times before.’ 

‘The clock is ticking down to our departure from the EU and there was no new news on a consultation about the future UK Shared Prosperity Fund, or the potential development of the Dormant Assets scheme to support community resilience. We may have to wait until the Spending Review to get more certainty about the Charity Commission’s budget’.

‘Critically, local authority finance remains in limbo, which means continued chaos on the ground for local charities in their relationship with local government, as demand for many services continues to increase. Much still depends on the outcome of the Brexit negotiations and the planned Spending Review next year. Time will tell whether this Budget is worth the paper it’s written on.’ 

For more information please contact Daniel Ferrell-Schweppenstedde, Directory of Social Change by email (dferrell@dsc.org.uk) or phone (020 7697 4293, 07932 072 597). 

Notes to editors:

• Founded in 1974, the Directory of Social Change (DSC) is a national charity which supports an independent voluntary sector through campaigning, training and publications. DSC is the largest supplier of information and training to the voluntary sector, and its work helps tens of thousands of organisations every year achieve their aims. Learn more at www.dsc.org.uk

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