The announcements made in the Spring Statement could further increase demand on an already overstretched charity sector.
Welfare reforms
The statement announced significant cuts to disability-related benefits, including tighter eligibility criteria for Personal Independence Payments (PIP) and stricter work capability assessments. These changes are expected to reduce the number of people qualifying for benefits, increasing demand for charity support.
Public service funding
Departmental spending will grow by just 1.2% in real terms per year from 2025/26 to 2029/30, with a 5% cut to administrative budgets across departments by the end of the decade. This tight spending environment could affect charities that rely on public service contracts.
Energy costs
There were no new measures to support charities with rising energy costs, which remains a significant financial burden.
Regulatory changes
On a more positive note, a new approach to regulation aimed at simplifying the regulatory environment across various sectors, including health, care, and civil society was announced. This could impact how charities operate and comply with regulations in a number of ways:
- The government has set a target to reduce administrative costs by 25% – intended to streamline operations and make regulatory processes more efficient. For charities, this could mean less time and resources spent on compliance and administrative tasks, allowing them to focus more on service delivery.
- The new regulatory approach emphasises supporting growth and tackling risk aversion in regulatory bodies. This could lead to a more favourable environment for charities to expand their activities and innovate without being hindered by overly cautious regulatory practices.
- Simplifying the regulatory framework for the Charity Commission could result in changes to compliance requirements, reporting standards and oversight mechanisms. Charities may need support in adapting to these changes so that they remain compliant while benefiting from reduced administrative burdens.
How we can help
These changes highlight the need for charities to adapt and find innovative ways to manage their resources and support their beneficiaries. Our specialist charities team work with a wide variety of charities and not for profit organisations, offering support and guidance through change and challenging times. Speak to us on +44 (0)330 024 3200 or hi@hhllp.co.uk to see how we can help you.
