Our response to the Autumn Budget 2024

It has finally arrived! After months of speculation and snippets of information, we now have the full Autumn Budget 2024 which outlines Keir Starmer’s Labour government’s spending priorities for the next 18 months.

With the many challenges that the voluntary, community, faith and social enterprise (VCFSE) sector have faced over the last few years, the pressure was on for the government to create a budget that empowers communities, builds inclusive growth and tackles the inequalities prevalent in our communities across the North West.

However, since the budget was announced on Wednesday, the overall reaction from the VCFSE sector has been a bit of a mixed bag.

The extension of the UK Shared Prosperity Fund (UK SPF) for a further year, from April 2025 to March 2026, is very much welcome. We recently wrote to the Chancellor to urge the government to continue this funding as a minimum, so it is a relief to see this has been taken on board.

However, with the level of funding allocated (£900m) compared to last years allocation (£1.5bn) vastly reduced, and as of yet no inclination of whether this amount includes funding for Multiply or any underspend, there are concerns about how this scaling back of UK SPF funding will impact VCFSE activity. It will be important for us to lobby for VCFSE organisations to ensure that wider funding reforms prioritise the sector as a key partner.

The budget also advances devolution, with integrated settlements for Greater Manchester delivering a single flexible pot of funding to deliver growth, with a further integrated settlement to be delivered for Liverpool City Region in 2026/27. We will continue to utilise our close working links with our regions combined authorities, including the proposed Lancashire Combined County Authority in the future, to ensure the sector has a role in this devolution.

A 3.2% rise in core local government spending is a step in the right direction. This increase, alongside £600 million in social care grant funding, should provide promising opportunities for the VCFSE sector. In particular, the government's emphasis on a "preventative approach to public service delivery" and giving "more power to communities to deliver more efficiently and effectively for civilians" is encouraging.

Time will tell whether this funding will translate into meaningful investment in the VCFSE sector. Achieving this will require a coordinated sub-regional and place-based approach to influence this local government spending effectively.

However, many of these more welcomed elements of the budget have been largely overshadowed by the announcement of increased employer national insurance (NI) contributions .

With the VCFSE sector already burdened by increased demand and falling funding, many organisations are already finding it extremely difficult to maintain their workforce and keep their services going. This, in conjunction with the rise in the minimum and real living wage, is putting extreme financial pressure on the sector which has already had to absorb ever increasing costs with our communities ultimately paying the price.

The sector can no longer afford to absorb these costs, nor should it be expected to subsidise public services. We will be monitoring this issue closely and will work to raise awareness of its impact on the sector. We will also outline actions that should be taken to mitigate these challenges, such as lobbying for contract uplifts where necessary.

NCVO has published an open letter to the Chancellor on the impact of increased NI contributions for charities, calling upon Rachel Reeves to exempt the VCFSE sector from this new policy and providing the same support to the sector as they have to public sector organisations. Sign the open letter to show your support.

The organisation has also produced a more comprehensive overview of the impact of the Autumn Budget on the VCFSE sector, so please check out the breakdown of key implications.

We are committed to making sure that the sector’s collective voice across the North West is heard and we will continue to advocate on behalf of the sector on the back of this budget. Through our upcoming work around maximising social value outcomes with the VCFSE sector and developing a regional fair funding protocol for the region, we will continue to work hard to ensure the sector is funded sustainably and recognised as a key delivery partner alongside our public sector services.