Vibeka Mair reports the vital statistics from yesterday’s Comprehensive Spending Review and gauges sector reaction.
Business, Innovation and Skills
Annual budget: £21.2bn
Cuts: Annual cut of 7.1 per cent, or 25 per cent over four years
Effect on charity sector: Science research charities are spared the axe, funding for training is cut but charities could benefit from new apprenticeship funding.
Details: The Train to Gain programme to be axed. Many charities benefited from grants to train their staff.
University funding to be cut and student tuition fees reformed, building on Browne review.
Funding for 75,000 adult apprenticeships a year announced.
The science budget is to be frozen - in cash terms.
Responses: Peter Weissberg, medical director of the British Heart Foundation, said: “Immediate reaction? Relief that science has been spared the deepest of cuts, followed swiftly by the realisation that even at about 10 per cent down, we’ll be playing catch-up in an international field which could see UK science left behind. We will have to wait before the full picture becomes clear, but it’s likely charities will now come under greater pressure to fund more medical research. Charities invest over a £1bn each year in vital medical research.”
Navca chief Kevin Curley welcomed the 50 per cent rise in apprenticeship funding saying it provided a big opportunity for local voluntary organisations to offer more apprenticeships and build on their success with the Future Jobs Fund.
Cabinet Office
Annual budget: £2.6bn
Cuts: £55m cut from budget.
Effect on charity sector: It was already known that infrastructure bodies will be hit as the Office for Civil Society cuts its strategic partner programme, but volunteering and community charities could gain from the focus on Big Society projects.
Chancellor George Osborne said the £2.6bn Cabinet Office budget would be reduced by £55m by 2014/15 but there would be additional money to support the Big Society by building the capacity of the sector and funding new community organisers. Funds will also be made available to pilot the National Citizen Service and set up a Community First Fund to support local and community organisations.
The OCS budget will be £470m over the next year and one of the first manifestations of this will be a £100m transition fund to help sector groups adjust to the spending cuts.
Communities and Local Government
Annual budget: £33.6bn
Cuts: Councils will see a 7.1 per cent annual fall in their budgets.
Effect on charity sector: Sector leaders fear deep cuts in grants and contract funding for charities and social enterprises that rely heavily on statutory funding.
New TRSC research shows that the proportion of third sector organisations receiving some public funding is larger than previously thought. Some 36 per cent of voluntary sector organisations, approximately 61,000, receive income from statutory sources and 23,000 organisations (13 per cent) consider public sources of income to be their most important.
In seven local authority areas, up to 25 per cent of sector organisations regard public sector income as their most important source. These tend to be among the more disadvantaged areas of the Midlands and the North. In both Nottingham and Knowsley, for example, the proportion could be as high as 30 per cent of all organisations.
Responses: Peter Holbrook, chief executive of Social Enterprise Coalition said: “Social enterprises, despite having a solid track record in delivering innovative and pioneering services across the public sector, from health and social care to housing, could lose out on future contracts because of the hurried decisions that some local councils will take under pressure to make cuts. Many don’t know about the social enterprise movement and what it is already delivering in many areas. They could miss opportunities to commission better services, or enable public sector staff to create social enterprises, and there is evidence that this is already happening. Social enterprise must not lose out to the private sector simply because commissioners already know that private sector providers exist locally.
“The danger will be that social enterprises will not be considered or invited to tender, even though they are experienced and good at making savings while protecting the quality of services.”
Culture, Media and Sport
Annual budget: £2bn
Cuts: Budget cut by 24 per cent over four years. Administration costs to be cut by 41 per cent while core arts programmes will see a 15 per cent fall in funding. Free museum and galleries entry to remain in place.
Effect on charity sector: Arts charities’ funding to be hit.
The Arts Council is having its budget cut by almost 30 per cent. It funds hundreds of arts charities and said the cut would have “a significant impact on the cultural life of the country”.
Overall its grant of £449m will drop to £349m by 2014.
National museums will take a cut of 15 per cent and will remain free to enter.
The Arts Council is also being asked to make a 50 per cent cut in its administrative costs.
Responses: Michael Boyd, artistic director at the Royal Shakespeare Company, said: “This will be a big blow to theatres - especially those who will also be losing local authority funding - and audiences will be the poorer. We are concerned that the settlement for the Arts Council doesn’t allow it sufficient room to manoeuvre.”
Education
Annual budget: £57.6bn
Cuts: A 3.4 per cent real-term fall over four years. Sure Start budget to be protected in cash terms. Funding no longer ring-fenced for School Sport Partnerships.
Effect on charity sector: Charities delivering Sure Start to be spared.
Responses: Commenting on Sure Start Children’s Centres funding being maintained in cash terms, Anne Longfield OBE, chief executive of 4Children, said: “Britain’s families will be relieved that Sure Start Children’s Centres will remain into the future, but with the ring-fencing of the grant expected to be removed we will be watching closely to ensure local councils fulfil their obligations to provide sufficient Centres. We also call on local authorities to make efficiencies in the Sure Start budget from administration and back-office functions, not from frontline services.”
Children's sports charity, the Youth Sport Trust, said it was "devastated" by the sweeping cuts to school sport funding. Chair Baroness Sue Campbell said: "This is devastating news …the 450 School Sport Partnerships have provided millions of hours of coaching, created thousands of new links between schools and clubs and introduced over a million more young people to competitive sport over the last three years.”
Steve Grainger, chief executive, added: “The cuts are staggering given the transformational change that has been created and the incredible results which have been delivered in school sport. With just 21 months to go until the start of the London 2012 Olympics and Paralympics, Lord Coe’s pledge to use the Games to transform sporting opportunities for young people is now hanging in the balance.”
Energy and Climate Change
Annual budget: £3.1bn
Cuts: 18 per cent cut over the period. Around £200m funding for wind power development and £1bn for green investment bank.
Effect on charity sector: Environmental charities could benefit from green investment bank.
Responses: Greenpeace executive director John Sauven said: “Billions of pounds for a new green bank could provide thousands of new jobs and make Britain a world leader in cutting-edge low-carbon technologies.
“But the green bank has to be a bank. A poorly financed fund is not a green bank. It doesn’t have the financial clout, or the independence to do the job, and will end up as nothing more than an ill-equipped quango.”
Health
Annual budget: £106.4bn
Cuts: NHS in England will get a 1.3 per cent real-terms rise in funding by 2015. New cancer drug fund to be provided. But £20bn in efficiency and productivity savings sought in NHS by the end of the parliament. An extra £2bn for social care by 2014/15.
Effect on charity sector: Health and social care charities to benefit, research charities likely to benefit.
Responses: Victor Adebowale, chief executive of Turning Point, said: “A civilised society protects the most vulnerable and for this reason, we welcome the additional £2bn per year which has been set aside for adult social care. Turning Point believes strongly in the need for greater integration between health and social care and supports the allocation of funds to ensure that this is achieved. In addition, we support the move to expand the Improving Access to Psychological Therapies (IAPT) programme to young and elderly people with mental health problems.”
International development
Annual budget: £7.7bn
Cuts: The overseas aid budget is to be protected from cuts. Budget to rise by 50 per cent to £11.6bn over four years to meet UN aid commitment. But aid to China and Russia is to stop and there will be a reduction in administration costs.
Effect on charity sector: International development charities to benefit.
Responses: Phil Bloomer, Oxfam campaigns and policy director, said: “With the aid budget staying almost flat for the next two years, the government needs to ensure that its increased focus on fragile states does not penalise poor people elsewhere. Hunger, climate change and the economic slump are all making life tougher for the poorest around the world so it is vital that the government delivers extra resources for the world’s poorest in 2013.
“The Chancellor should introduce a Robin Hood Tax on banks to pay to reverse cuts affecting poor people in the UK and provide additional resources to help poor countries cope with the devastating effects of climate change.”
Joni Hillman from BOND added: “This is very positive for the sector, we are pleased the government is maintaining its commitment to UN targets.”
Justice
Annual budget: £9.7bn
Cuts: Budget to fall by 6 per cent a year, equivalent to 23 per cent over the period. A new Green Paper will set out proposals to reform sentencing, intervene earlier to give treatment to mentally ill offenders, and use voluntary and private providers to reduce reoffending.
Effect on charity sector: Could deeply affect charities in crime prevention. But MOJ has committed to charities through Social Impact Bonds, a rehabilitation scheme to be delivered by charities.
Michael O’Toole, chief executive of 3SC said this week at Charity Finance Live that around 650 civil society organisations deliver MOJ projects.
Responses: Frances Crook, director of the Howard League for Penal Reform, said: “As suspected, the Ministry of Justice has been one of the most prominent victims of the spending review, with cuts of almost 28 per cent from its current budget.
“Even with some £1.3bn earmarked for maintaining the ageing prison estate, such cuts will only be achieved by reducing the prison population and closing prisons. To that end, we welcome the announcement that plans for yet another super-sized prison are to be effectively abandoned.
“Nonetheless, we should be clear about the challenge the Ministry of Justice faces. Simply slashing jobs and opening the prison gates is not an option. That is particularly the case if probation budgets are similarly squeezed, as seems likely.”
Work and Pensions
Annual budget: £9bn in departmental spending
Separate welfare and pensions budget: £192bn
Cuts: A further £7bn in welfare savings planned on top of £11bn already announced. A new 12-month time limit for the one million people on employment and support allowance to find work or face benefit cut. All working age benefits and tax credits will be replaced with a single Universal Credit.
Effect on charity sector: Could benefit welfare-to-work charities.
George Osborne said the government would seek to use voluntary and the private sector help people get back into work.
Responses: Sally Burton, chief executive of the Shaw Trust, gave a cautious welcome to the announcement: “As the UK’s largest sector provider of specialist employment services, Shaw Trust welcomes the welfare reforms and supports the belief that people are better off in work than unemployed and stuck on benefits. However, we are concerned that an insufficient number of jobs will hinder those in disadvantaged circumstances.
“We need a tangible commitment from this government that it will support the sector, reduce the red tape and protect its ambitions within an already reduced welfare-to-work budget to enable organisations to engage with local communities and make big society a reality.”
Treasury
Annual budget: £4.4bn
Cuts: 33 per cent cut in budget over four years.
Effect on charity sector: Charity Commission budget to be cut.
The Charity Commission will see its annual funding drop by 27 per cent over the next four years.
The regulator said it anticipates reducing its workforce by around 140 full-time staff in order to cope with a reduction in its funding to £21.3m by the 2014/15 financial year.
Its capital funding is also being reduced by 50 per cent to £400,000 each year.
Responses: Commission chair Dame Suzi Leather called the settlement “extremely challenging”.
