Our Policy Manager, Philippa Rousell, shares her reflections on the government’s 2024 Budget.
This week saw the first Budget of the new Labour government, setting out their spending plans for the next year.
Given all the warnings about tough decisions that would need to be made, I was expecting to be far more disappointed by the Budget. Nobody was expecting it to solve all the country’s problems overnight, but I was expecting to see a lot more reductions in departmental spending, rather than the real terms increases that many departments have received. The effects of austerity will take a while to counteract, but we’re heading in a more positive direction.
Some of the measures targeted at businesses will hit charities like Changing Lives pretty hard. Increasing the minimum wage is overall a good thing to do, and increasing employers national insurance contribution was likely unavoidable, but this will cause charities who were already operating on tight budgets to have to find even more to meet their operational costs. Bear in mind that charities can’t pass on price increases, for example, to make up for these additional costs so it would have been good to hear how the government might help charities mitigate the costs, as they are doing with public services like schools.
Local authorities are seeing a real terms increase in their funding, which will be positive for both public services and the charities who provide many of these services. It’s particularly encouraging to see an additional £233 million to tackle homelessness and rough sleeping. This may not be as high as we would have liked due to various funding pots ending between now and April, but something is better than nothing! The real shift will likely come in the spring when the cross-departmental homelessness taskforce has had a chance to review how the whole system is funded.
There’s some good news for people on Universal Credit (i.e. most of the people who access our services). Most notably, Universal Credit deductions will be reduced from 25% to 15%, leaving people with more money to spend each month. Reducing the deductions rate is something we and many other organisations have been calling for so it’s great to see the government is listening. We’re also encouraged to see an extension to the Household Support Fund.
There’s still a lot we don’t know yet. Departments will now have to figure out how they will spend their funding allocation outside of the ringfenced funding already set. We didn’t hear anything about funding for addiction and recovery services for example – in fact public health barely featured, with most additional health funding going towards the NHS. Hopefully we’ll hear more soon to give the sector some much-need reassurance.
Overall it’s not a bad start. Would we have liked to see more? Yes. Was more ever a realistic possibility? Not really. The bigger more exciting changes are also more likely to come in the spring, after several reviews like the NHS 10-year plan and the Sentencing Review have been completed. This will be the opportunity for government to not just throw money at problems, but to fundamentally reform some of our systems which aren’t working as well as they could.
