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A Plan for Growth Prosperity and Purpose? – The Spring Budget, March 2023
On 15th March 2023 the Chancellor of the Exchequer, Jeremy Hunt, announced his Spring Budget in the House of Commons.The Chancellor advised this Budget was a plan for growth with new measures on childcare, energy bills and pensions.
The Budget was also announced in line with forecasts from the Office of Budget Responsibility (OBR) who have now reported the UK would not fall into a technical recession as predicted.
MVA offers some of the key points below:
Childcare
The Chancellor announced parents are to be given an extra 30 hours a week free childcare for every child over 9 months old, which would be available straight after their parental leave ended.
This package is said to be worth an estimated £6,500 every year for a family with a two-year-old child using 35 hours of childcare every week and would reduce childcare costs by nearly 60%.
This measure is to be introduced in stages; with working parents of two-year-olds being able to access 15 hours of free care from April 2024, and then for all children from 9 months up from September 2024.
It was also announced that every single working parent of under 5s can get access to 30 hours free childcare per week from September 2025; those on universal credit will be given help up front instead of in arrears.
The minimum staff-to-child ratios in nurseries will also be changed from 1:4 to 1:5 for two-year-olds in England as happens in Scotland.
Energy Bills
The Chancellor announced the Government’s Energy Price Guarantee, which was due to rise to £3,000 in April 2023, is to remain at its current level of £2,500 till July.
In recognition of the efforts made by consumer rights champion Martin Lewis and many charities, it is said the measure will save the average family a further £160.
It was also announced prepayment meter customers (usually those on low incomes) will no longer be charged more for energy than people who pay by direct debit.
This means more than 4 Million households could see an estimated £45 a year saving on their bills.
Benefits
In the Budget it was announced the Work Capability Assessment is to be scrapped.
However, The Chancellor did advise sanctions will be applied more rigorously to those who fail to meet strict work-search requirements or choose not to take up a reasonable job offer.
It was also announced a new scheme called Universal Support is being launched, which is a voluntary employment scheme for disabled people.
The Government is to provide up to £4,000 per person through this scheme to help them find “appropriate” jobs and is set to fund 50,000 places a year.
Fuel and Alcohol
The Chancellor announced the 5p cut in the price of petrol and diesel will be kept along with the freeze on fuel duty for a further year.
It is said this would save the average driver £100 next year, around £200 since the 5p cut was introduced.
A new Brexit Pubs Guarantee was also announced which will see the tax on draught beer served in pubs being up to 11p lower than the duty in supermarkets.
Help for Charities
The Charity Sector is to receive £100 Million.
In a surprise announcement at the start of the Spring Budget, The Chancellor announced The Government is to pledge this money to help organisations to back people struggling in tough times.
It is said that most of the money (approximately 3/4) is to be delivered as grants for frontline charities and community organisations in England during the 2023-24 period.
The aim of this monies is to help those organisations most impacted by increased demand for support from the vulnerable and people at risk, as well as for increased delivery costs.
It was also said the rest of the monies are to be used to fund measures over the next two years to increase the energy efficiency and sustainability of voluntary, community and social enterprise (VCSE) organisations.
It is suggested these measures can include funding for new boilers, heat pumps and insulation, allowing charities to deliver more efficient services for vulnerable individuals.
At the time of writing, details on how this funding will be distributed have yet to be announced.
An additional £10 Million was also pledged to help charities in their existing work to prevent suicide.
Other highlights included a new “full expensing” policy for companies buying equipment, and The Ministry of Defence is to be given an extra £5 Billion over two years.
Reaction from the Charity Sector
Voluntary organisations did welcome The Chancellor’s recognition of the Sector, as well as the money for charities in his Spring Budget.
However, many still warned of the continued hardship faced by their beneficiaries and other people they support.
The Charity Commission welcomed the £100 Million pledge from the Government, saying it will help charities continue to support vulnerable people during a period of significant financial challenge.
Similar sentiment for national charity Samaritans, who welcomed the funding but urged on a need for an ambitious and well-funded national suicide prevention strategy.
The National Council for Voluntary Organisations (NCVO) seemed to express relief at The Chancellor now recognising the role of charities in supporting communities through the Government’s pledge.
The Association of Chief Executives of Voluntary Organisations (ACEVO) expressed similar sentiment.
The Charity Finance Group (CFG) agreed with this, but also advised that as the cost of living continues to bite hard they wait to see how the (£100 Million) funding will be distributed.
Think tank and consultancy firm New Philanthropy Capital (NPC) expressed the Government’s pledge as a campaigning success for the Charity Sector, and await the details on how this will be distributed.
Similar opinion was voiced by Charities Aid Foundation (CAF) citing the Government’s pledge is a recognition of (the Charity Sector’s) work and is a step in the right direction.
However, national economist charity Pro Bono Economics (PBE) observed credit more to the OBR rather than the Chancellor for delivering a cause for reduced pessimism.
To read the Chancellor’s Spring Budget speech in full, or for more information, visit the UK Government website.