Summary of Spending Review 2013

On Wednesday 26 June, Chancellor George Osbourne unveiled his spending review, which is summarised below by the Charity Finance Group (CFG).

• A cap on welfare payments: Plans for a cap on over £100billion of welfare spending have been confirmed. The cap will be applied from April 2015 and will exclude the basic and additional state pension and Jobseekers Allowance. However, most other tax credits and social security expenditure will be included, such as disability, housing and pensioner benefits.

• Deeper cuts to local government: Local government budgets will be cut by a further 10 percent in 2015-16, having already experienced over 35 percent cuts in real terms since 2010, although various other pots of money will bring the actual cut down to 2 percent in 2015-16. Either way, further cuts are likely to leave charities facing more increases in demand for their services while income from statutory sources looks set to continue to decline.

• 6 percent further cuts to Charity Commission: The Charity Commission, whose budget has already declined by around 50 percent in real terms as a result of the 2010 Spending Review, will see a further 6 percent (£1millon) cut from its budget in 2015-16, possibly forcing it to consider alternative funding options, including charging charities for registration and top slicing Gift Aid have both been mooted.

• Office for Civil Society escapes further cuts: OCS funding will remain static in real terms, but at £56million, it is a huge step down from the £191million it received in 2010-11, the first year of the Coalition Government.

• Integrated health and social care planned: Some services will be jointly commissioned by local authorities and the NHS from 2015-16, to avoid duplication and ensure that individuals are not left ‘stranded’ between the two. £3.8billion of jointly commissioned services (known as ‘Community Budgets’) will be made available in 2015-16.

• Cuts to museums, the arts and community sport capped at 5 percent: This comes against a backdrop of 7 percent cuts across the Department for Culture, Media and Sport as a whole. The commitment to free museum entry is also maintained. A four year pilot to increase operational freedoms to museums has also been announced.

To read CFG’s full briefing on the spending review visit http://cfg.org.uk/~/media/Files/Policy/Recession%20Watch/CFG_briefing_Spending_Review_2013.ashx.

To view the full list of budget documents visit www.gov.uk/government/publications/spending-round-2013-documents.

To read NCVO’s guide to the spending review visit http://blogs.ncvo.org.uk/2013/06/26/spending-review-2013-a-2-minute-guide-on-whats-important-for-charities.