Coalition Government / Budget 2010: How will it affect you?

Following the Elections and the Emergency Budget (22/06/10), KVA has been analysing statements from central and regional government and partners.  We have drawn together some of the key points from London Voluntary Services Council (LVSC) and National Council for Voluntary Organisations (NCVO) for the voluntary and community sector’s consideration and to illustrate potential implications for the sector.

• NCVO response to the Budget
• LVSC policy position statement
• Extract from Coalition Government's Big Society
• Response from Hilary Garner, Chief Executive, KVA

NCVO have set out their response to the Budget

1. Departmental budgets face an average real cut of around 25% over four years (apart from health and aid spending which is protected).
2. VAT will increase to 20% in January 2011. Although this will impact on the sector, the Government has committed to work with sector bodies to assess the feasibility of implementing the EU cost-sharing exemption in VAT.  A formal consultation on this will be launched in the autumn.
3. The Budget includes a commitment to continue to work with the sector, including the Gift Aid forum, to improve the system and to encourage more charitable giving.  NCVO will be working to persuade government of the need to simplify the current system.
4. Substantial charity donors.  HMRC intends to replace the current rules and will be consulting informally on this through the summer. Full legislation will be published in the autumn. 
5. The National Lottery.  Alongside the Government’s consultation on the allocation of good causes funding from the National Lottery, the Government will review the current National Lottery taxation arrangements. 

LVSC have issued a policy position that includes the following statements:

1. Public service delivery. We welcome the coalition government’s recognition of the importance of the VCS and social enterprise in delivering services. We want to work with government, at all levels to ensure that commissioning processes do not exclude VCS providers.
2. Big Society. We welcome the recognition of the VCS’ role in encouraging social action, as expressed in the ‘Big Society’ paper. We want to work with the government to ensure this can be implemented using the extensive networks and experience of VCS organisations, staff and volunteers that already exist in London.
3. Community organisers. We support the concept of community organisers. We believe to maximise impact, it should build on existing VCS staff, volunteers, organisations, training and structures. For example, London already has a network of development workers and a Council for Voluntary Service in every London borough.
4. Volunteering. We welcome the focus on volunteering, including the plans for more civil servants to volunteer, but believe a distinction should be made between what is “real” volunteering and what is an internship or work placement. The creation of new volunteering programmes requires dedicated resources.
5. Compact. We seek assurances of the new government’s commitment to the principles of the Compact.
6. Cuts. We welcome the commitment of the coalition to make spending cuts in a fair way.

And from the Coalition’s “Big Society”, key areas for voluntary and community sector consideration are:

Give communities more powers

· We will introduce new powers to help communities save local facilities and services threatened with closure, and give communities the right to bid to take over local
state-run services.

· We will train a new generation of community organisers and support the creation of neighbourhood groups across the UK.

Encourage people to take an active role in their communities

· We will take a range of measures to encourage volunteering and involvement in social action, including launching a national ‘Big Society Day’ and making regular community involvement a key element of civil service staff appraisals.

· We will take a range of measures to encourage charitable giving and philanthropy.

· We will introduce a National Citizen Service. The initial flagship project will provide a programme for 16 year olds to give them a chance to develop the skills needed to be active and responsible citizens, mix with people from different backgrounds, and start getting involved in their communities.

Support co-ops, mutuals, charities and social enterprises

· We will support the creation and expansion of mutuals, co-operatives, charities and social enterprises, and support these groups to have much greater involvement in the running of public services.

 · We will give public sector workers a new right to form employee-owned co-operatives and bid to take over the services they deliver. This will empower millions of public sector workers to become their own boss and help them to deliver better services.

· We will use funds from dormant bank accounts to establish a Big Society Bank, which will provide new finance for neighbourhood groups, charities, social enterprises and other nongovernmental bodies.

Hilary Garner , Chief Executive of Kingston Voluntary Action says,
“I believe that Kingston is well placed to build on its strong track record of working with and providing support to the Voluntary and Community sector.  We have most recently agreed at the Voluntary Sector Forum (13 May) how we will take forward National Indicator 7 ‘Creating an Environment for a Thriving Third Sector’ and how we will strengthen the Compact.  We are thus committed to setting out a new Voluntary Sector Strategy.  However, we need to assess the ambitious goals set out in the coalition programme and we realise that these will not be achieved overnight.  A great deal of awareness-raising and training of both the statutory and voluntary sectors will be required to enable high quality capacity building within local communities to take place.  KVA will be assessing the key points from the coalition programme and then setting out where we are in Kingston and what might need to be done to meet the government goals.”