It's been a busy time with the launch of two significant consultations, changes in Scotland and meetings with MPs.
There's lots and lots to catch up on, I barely know in which end to begin! The logical place to start – and I promise to keep this brief as I'm sure you are as tired as I am of hearing about the UK's economic woes – is with last week’s Spring Statement.
Unsurprisingly, charities didn't receive a mention in the Chancellor's speech. What we did pick up on, however, were welfare cuts that will likely increase demand for charitable services, just as charities are preparing for the imminent Employer National Insurance Contributions (ERNICs) increase.
Seeing that the increase in ERNICs will be implemented without any of the Lord’s amendments aimed towards supporting charities, a small gesture of goodwill in the Spring Statement would have been welcome, but we'll have to pin our hopes on the Spending Review later this summer. For those wanting the full details, our complete analysis is available here.
Now, let's shift to some more positive news from Scotland! The Scottish Government has announced they'll raise the audit threshold for charities from £500,000 to £1 million annual income, bringing Scottish charities in line with England and Wales. This means that lower income charities will no longer need to have their financial statements audited, a process which has proven burdensome for smaller charities that were never intended to be included in the auditing scope.
Still in Scotland, the Scottish Council for Voluntary Organisations (SCVO) reports that public sector funding has fallen by 5% in real terms since 2021. These figures are concerning, especially considering public funding represents 40% of the sector's income.
For the Scottish news trifecta, an analysis of the public consultation on charity regulation review has also been published – all details available here for the curious among you.
Turning to the Opposition party, I recently attended a Pro-Bono Economics event on the Conservative Party's relationship with the charity sector. The shadow culture secretary and former civil society minister expressed commitment to strengthening ties between Conservatives and charities. We are, of course, pleased to hear this and hope to meet with the minister soon to discuss this further.
Speaking of the Conservatives, CFG's Head of Policy Richard Sagar and I recently met with MP Blake Stephenson to discuss sector challenges. Mr Stephenson kindly submitted our written question about publishing an assessment of the impact of the increase in ERNICs for the charity sector – one of the Lord's amendments rejected by the Commons. James Murray's response wasn't crystal clear but, reading between the lines, we suspect a proper impact assessment isn't on the cards.
Busy times ahead with the Statement of Recommended Practice (SORP) consultation now open for 12 weeks. The SORP outlines financial accounting and reporting requirements for charitable entities.
CFG will be heavily involved in all the phases of the SORP development from consultation to implementation and you can find more information about all of this here. We have lots of things planned on SORP, so look out for updates!
Alongside the SORP consultation, we'll also be working with members and sector partners on the government's review of 17 financial thresholds in charity law, launched today! Please do get in touch with our team if you'd like to feed back and share comments about either or both of these two significant consultations.
Before I go, there's one final thing to keep an eye out for: the Charity Commission is set to publish its first-ever sector risk assessment, including a focus on financial resilience. We're eager to see what risks they identify and, importantly, how significant they're deemed to be and what can be done to mitigate them.
That's all for now. I hope this latest roundup proves useful in navigating our ever-changing sector landscape.
Until next time!
Ida