Autumn Statement 2016 – what’s in it for charities?

Phillip Hammond has delivered his first – and last (more on that later) – Autumn Statement since being appointed to the role of Chancellor earlier in the year. The Government’s first major fiscal statement since the Brexit vote earlier in the year saw Mr Hammond set out tweaks to taxation and spending plans, as well as updating the House of Commons on the Office for Budget Responsibility’s  (OBR) growth figures.


Mr Hammond began by informing the House of the OBR’s growth forecasts, with growth now set to be 2.4% lower over the forecast period than previously stated. This, combined with new measures that the Chancellor announced to stimulate growth, particularly in investment and infrastructure, means that borrowing will be £122 billion higher than previously forecast. As a result, the Chancellor abandoned the Government’s previous fiscal target of wiping out the deficit before the end of the Parliament, and introduced three new fiscal rules to establish his new fiscal mandate.

As ever, the Autumn Statement included a number of measures affecting charities, although arguably fewer than in previous years. Some of the things for charities to be aware of include:

  • Committing a further £102 million of banking fines over the next four years to support charities, including £20 million for the Defence and National Rehabilitation Centre in Nottinghamshire
  • Giving £3 million raised from the ‘Tampon Tax’ to Comic Relief for distribution to a range of women’s charities
  • Incidentally, from December women’s charities will be able to bid for proceeds from the Tampon Tax, and military and emergency charities for funding from banking fines, which has introduced a much welcomed transparency and accountability into the distribution process
  • Tweaks to the Social Investment Tax Relief, meaning that social enterprises aged up to 7 years can now raise up to £1.5 million through SITR, with the Government committing to a further review once the enlarged scheme has been in operation for two years
  • A reaffirmation of the commitment to spending 0.7% of GNI on Official Development Assistance, although this will mean a cut in forecast spending of up to £210 million a year by 2018-19 as a result of the revised growth forecasts
  • Reaffirming plans to give intermediaries a greater role in administering Gift Aid, aimed to simplify the Gift Aid process for digital donors
  • A commitment to amending the Gift Aid Small Donations Scheme to improve its flexibility and access – although it is worth noting that legislation on this is already passing through Parliament


There are of course other measures that will have an impact on charities, including tweaks to museum and galleries tax relief, moves to support projects tackling rough sleeping, incentives for organisations to introduce full-fibre broadband and exempting Community Land trusts from the policy to reduce social sector rents by 1% a year for 4 years from 2016. In addition, charities will need to be aware of the impact of changes to the National Living Wage, as well as to tax thresholds. You can access the Autumn Statement documents in full here.


All-in-all, a mixed bag for charities. Support for individual organisations is of course welcome, and the Government’s commitment to using both banking fines and Tampon Tax proceeds is to be applauded, particularly now that recipients will be determined more equitably. Tweaks around the edges to schemes that incentive donors, charities, and social enterprises are always welcomed, but do not necessarily have the transformative effect that the sector was looking for.


The Autumn Statement revealed much more about the economic climate that we face which, combined with the country’s social climate, poses both challenges and opportunities for charities. Within the Chancellor’s announcement is the clear proof that the Government understands the impact that charities can make, and why they should be involved in delivering services to support vulnerable people and help strengthen the country.


However, we want to see government go further and do more to work in tandem with charities, using their reach, resources and expertise to make a difference. Charities can be at the heart of the solutions to many of the challenges that the country faces, and we urge the Government to continue to explore how greater collaboration between charities and government can help deliver a country and an economy that truly works for everyone.


Commenting on the Autumn Statement, CAF’s Chief Executive Dr John Low said:


“By allocating money to charities supporting the armed forces, emergency charities and heritage projects and giving Comic Relief a role in helping to distribute proceeds of the tampon tax, the Chancellor has acknowledged the great positive contribution charities make in these important areas. With the process for distributing this money and Libor fines now made more open and transparent we hope to see greater numbers of charities and causes being able to benefit from this funding in the future.


“The Chancellor today confirmed that growth in the economy over the next five years is expected to be smaller than previously forecast.


“We know that during uncertain times charities are increasingly relied upon to get support to those who need it most. In recent years charities have been used to seeing demand for support increase while their resources have been increasingly stretched.


“Charities have a big role to play in building a better society and a fairer economy and it will be vital that government embraces their expertise and influence in shaping some of the new policies announced today.”


Finally, as alluded to earlier, the Chancellor concluded his statement by announcing that the Autumn Statement would be scrapped. Instead, in the future the Government will deliver its budget in the autumn, giving a few months for adjustments before the start of the financial year in April. Instead, there will now be a Spring Statement at which the Government will respond to the OBR’s latest growth forecasts. Mr Hammond was keen to stress that this would not be used to amend taxation plans unless the Chancellor of the day deemed changes to be necessary – leaving enough flexibility for future Chancellors to return to two major economic statements a year if they so wish. I, for one, remain unconvinced that Chancellors of the future will pass up the opportunity to command the nation’s attention given the chance!

What do you think about the Chancellor’s Autumn Statement, and how will it affect you and your organisation? Let us know at, or on twitter @cafonline


Steve Clapperton

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