Caroline Hartnell

Charity leaders have fallen over themselves to applaud UK Chancellor George Osborne for what he himself describes as ‘the most generous reforms to charitable giving for 20 years’ in this week’s Budget. John Low, Chief Executive of the Charities Aid Foundation, described Osborne as having ‘delivered for charities and those who want to support them’, while Ralph Michell, head of policy at the chief executives’ body Acevo, welcomed the package ‘wholeheartedly’. In similar, though more reserved strain, the Charities and Philanthropy Team at law firm Withers talk of a ‘number of truly positive measures in connection with philanthropy and charitable giving’.

Those measures include reform of Gift Aid, so that charities can claim Gift Aid on donations totalling up to £5,000 per charity without any paperwork, implementing an online claim system for the tax relief by 2013, and a 10 per cent tax break on inheritance tax for people whose wills include a 10 per cent legacy to charity. Osborne also said the government would increase the Gift Aid benefit limit, which sets the value of items or services that a charity may give to a donor in return for a donation, from £500 to £2,500, as part of measures to ‘encourage wealthy people in our society to give even more’.

Even so, some in the sector have not been carried away with enthusiasm. Ralph Michell’s chief at Acevo, Sir Stephen Bubb, welcomed what he called the legacy of better giving for generations to come that the Budget would leave, but added: ‘now we need government to get a grip on local cuts so that today’s generation of charities is still around to benefit tomorrow.’ Much more critically, Rachael Maskell of public sector trade union Unite said: ‘George Osborne failed to address the central issue facing the not for profit sector – how to bridge the £4.5bn chasm in funding that his government has caused by their austerity programme.’

When it comes to the wider picture, too, charities might want to temper their praise for the Chancellor with some reflection on whether they have allowed the promotion of their own interests to blind them to the interests of those they claim to serve. The Budget has not been good news for everyone. According to the Treasury’s own calculations, the poorest fifth of households will find themselves 4 per cent worse off by 2014-15 and the poorest 10 per cent of households will be more than £150 worse off next year, the outcome of the combined effect of the tax and benefit changes the coalition has announced since it came to power. According to the Guardian (24 March), the £18 billion taken out of welfare payments is likely to hit hardest the disabled and those receiving housing benefit for renting in the private sector. The country is still waiting to feel the full effects, both on services and on unemployment, of the growing wave of public sector cuts resulting from last October’s Spending Review.

The general picture is starkly, if polemically, outlined by Len McCluskey, Unite general secretary: ‘In Bleak Britain it seems the way to survive is do not live outside the wealthy parts of the country, do not rely on public services, make sure you have plenty of money – and absolutely do not have a family.’

Charities might argue that what is good for them will be good for their beneficiaries but the Chancellor’s ‘generous reforms’ are unlikely to go very far in loosening what Mervyn King, Governor of the Bank of England, has called the worst squeeze in living standards since the 1920s.

For more information
http://www.thirdsector.co.uk/News/DailyBulletin/1061503/Gift-Aid-reform-tax-relief-figure-prominently-Budget/324E46DFA6304F2E4F0B21DADFCC62CD/?DCMP=EMC-CONDailyBulletin
http://www.unitetheunion.org/news__events/latest_news/_bleak_britain__-_money_worrie.aspx
http://www.guardian.co.uk/uk/2011/mar/23/budget-2011-winners-and-losers?INTCMP=SRCH