Ten sector bodies including the Charity Finance Group and NCVO have written to the Chancellor of the Exchequer ahead of the Budget and called for an increase in the pay back of National Insurance Contributions.
Ahead of next month’s Budget, which takes place on 16 March, the bodies have signed the letter calling for the proposals – which are mainly aimed at small and medium sized charities – because they “believe that it is vital that government invests strategically in the sector so that voluntary organisations can continue to meet society’s rapidly changing needs”.
The ten umbrella organisations to sign the letter addressed to George Osborne are Charity Finance Group, Lloyds Bank Foundation. Navca, Small Charities Coalition, Big Society Capital, Locality, Association of Charitable Foundations, Voice4Change, Acevo and NCVO.
The bodies state that due to a rise of the National Living Wage, costs to the sector will be £500m by 2020 – according to the Third Sector Research Centre. Reflecting help offered to businesses, they are calling on the government to “develop a parallel package of support for voluntary organisations to alleviate the increased salary costs associated with the introduction of the National Living Wage”.
They propose that the voluntary sector receive support through introducing incremental increases in the amount that charities can claim back on National Insurance Contributions in line with the increases in the National Living Wage.
Caron Bradshaw, chief executive of Charity Finance Group, said: “It is important that the voluntary sector continues to be proactive in putting forward initiatives and policy proposals to ensure that our sector is able to meet the needs of the people and communities that rely on us.
“Charities have already diversified their funding streams and have sought to streamline their operations. It is in the government’s interest to provide strategic investment in the sustainability of the charity sector – especially to small and medium sized charities that are best placed to deliver services to those most at risk.”
Further proposals
Other proposals include maintaining mandatory charitable business rates relief at 80 per cent, which they say will ensure that critical relief is able to support tens of thousands of charities and ensure money is directed to helping those who need support.
They are also calling on the Chancellor to direct unspent Apprenticeships Levy funds from charities towards investment in voluntary sectors skills. They said that this is so the Levy works for the sector and helps meet the needs of beneficiaries into the future.
The umbrella bodies have also called on the Chancellor to engage with the sector on the Dormant Assets Commission, and set out how the government will ensure its “independent and has transparent decision-making processes”.
The letter also calls for the allocation of 3 per cent of proceeds from government assets sales to support a Community Capital Fund. It says that this will ensure the sale of government land and proprieties leaves a long term legacy of stronger and more self-sufficient communities. And that windfalls, such as those directed from Libor Fines, continue to be used to fund initiatives to increase the sector’s capacity.
The Charity Tax Group made its budget submission earlier this month, which warned that the apprenticeship levy will have a “disproportionate impact” on the charity sector.
