The UK charity sector's income will decline by £2.2bn in real terms by the end of 2023-24, a snap analysis following yesterday's autumn statement has forecast.
Pro Bono Economics estimates that charity income will rise by around £1bn in cash terms during 2023-24, but if costs rise in line with broader inflation then the real value of that income for the charity sector will decline by £2.2bn.
It estimates that the sector’s income in 2022-23 will be £60.6bn, while in 2023-24 it is expected to be £58.4bn.
The think tank looked at rising costs, government spending plans and household finances, and analysed the new data from the Office for Budget Responsibility.
Following the chancellor Jeremy Hunt's statement, Pro Bono Economics added that a recession would exacerbate poor volunteering rates coming out of the pandemic.
The think tank also suggested charities focused on employment and training, non-profit playgroups and nurseries, and law and advocacy charities are particularly exposed to this risk, as government income makes up such a significant proportion of their income.
‘Charity demand is already rocketing and will only intensify’
Matt Whittaker, chief executive of Pro Bono Economics, said with the country now in recession and the cost of living crisis, “the demand for charity support will be substantial”.
Although he said the government has taken important steps to protect the most vulnerable in the chancellor’s autumn statement, he noted benefit uprating will not kick in until the spring and timelines for additional payments are still unclear.
“Charity demand is already rocketing and will only intensify as we head into winter. Given the enormous pressure on public spending and household budgets, charity income will inevitably dip as people have less to give and government funds are stretched,” he said.
Whittaker said the sector will need strategic investment now and in the long-term to weather this storm and future crises.
He added the sector's potential as a partner to the government “should also not be ignored”.
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