Leadership Charity finance policy

What does the new prime minster mean for the charity sector?

By David Ainsworth, Sector Specialist, CFG

So once again, the political wheel has turned, and there is a new set of people around the cabinet table. The election of a new prime minister, and the choice of a new cabinet, presents significant threats and opportunities for the sector.

By the end of the weekend, we will learn if the post of charities minister still exists. The post has been stripped of most of its power and almost all the budget - and downgraded to a joint position with sport, gambling and loneliness - and junior ministers altogether have been able to achieve little in a febrile Brexit atmosphere.

It no longer seems likely that a specialist minister should be the first port of call for the sector. The solutions to the biggest issues we face are now in other departments.

What the sector really needs is hugely increased social care funding, and increased local government funding as urgent priorities, together with a wider review of how commissioning works. For very many of our members, benefits are also a key issue, because cuts here are driving increased need.

One message from last night is positive: there will be more money around, including potentially a significant funding boost for social care – although so far, Boris has said only that he has a plan to address social care, and has given no indication what it is.

There is also, however, a much more negative message: Boris Johnson's cabinet appears to be designed to plan for no-deal and an early general election. It is largely made up of individuals with limited ideological support for charity and for our approach. So there is likely to be limited scope for lobbying and engagement.

One saving grace is that the chancellor, Sajid Javid, is a more moderate figure, and so we can be relatively hopeful that in the short order, there will no meaningful change around charity tax reliefs. We can expect an autumn budget which will offer more clarity here.

The key thing to be aware of is that the news last night points strongly to an early general election. And if Johnson wins it, a No Deal Brexit.

It looks plausible that Johnson will go to both Europe with the expectation that he will not win a new deal, and to Parliament with the expectation that he will not be allowed to leave without one, and that his next step will then be to go to the country, in the hope of uniting the leave vote behind the Tories, and winning an overall majority against remainers divided between the Lib Dems and Labour.

Once again, this presents both threats and opportunities for charities, although more of the former. A no-deal Brexit is widely predicted to be disastrous for beneficiaries and for the economy – see our briefing on it. We have to expect a considerable threat to income and service delivery. The chances of it appear, at least on the face of it, to have skyrocketed since yesterday.

Obviously, though, a general election is an opportunity, although in the current climate a slim one, to put our case, and to get charitable asks into party manifestos.

For CFG, there are two sector-specific issues we would like to see addressed: the UK Shared Prosperity Fund which (if we leave) will be the successor to current European funding. And the release of funds currently held in dormant assets. Both of these are worth billions for the sector. A debate on the UKSPF is tabled for September, as soon as parliament returns from recess, and we will be involved in briefing on this.

For now, the impact of our sector is dwarfed by the potential impact of Brexit. Now more than ever we need to ramp up activity around UKSPF and addressing social and economic consequences of No Deal Brexit and divided society.

Let us know how your well your charity is prepared for Brexit in this very short survey

This post was last reviewed on 25 July 2019 at 16:12
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