Spending Review: Our response

Sir Stuart Etherington, our Chief Executive, has today responded to measures set out in the Government’s spending review relating to the voluntary and community sector.  These include the announcement of a new £100 million transitional fund, and additional resources to implement the Big Society agenda.

His response came after Chancellor George Osborne unveiled details of how the coalition will achieve the promised cuts of £83 billion in public spending.

Sir Stuart said:

"We should be under no illusions: the coming months will be difficult for the people and communities we work to support."

"We know from our own research that many organisations lack the financial resources to cope with sudden cuts in income. So the announcement of transitional support for voluntary and community organisations is very helpful. 

"It demonstrates that the Government has listened to the sector and understands the important role we will play in helping to address the challenges we all face in the coming years.

"The transitional fund should go some way towards mitigating the impact of spending cuts on frontline organisations, and help to safeguard their ability to deliver vital services. 

"We look forward to working with the Government to ensure that the new transitional fund delivers on its goals and is accessible to the organisations which need it the most.

"Local government is the main source of statutory funding for many voluntary and community organisations.  We are calling on local authorities to ensure that they don’t treat our sector as a soft option for cuts. 

"That is why NCVO and Volunteering England wrote to the Minister for Civil Society this week, making the case that where cuts need to be made, they should be phased in over four years to give the sector the best chance of maintaining essential services and adapting to the challenging times ahead."

After arguing that tackling the deficit was unavoidable, the Chancellor said, "Today is the day when Britain steps back from the brink." He said that each year the UK pays back £43 billion in debt interest but that the measures announced today would mean these repayments decreased year on year as the deficit was reduced. He also confirmed that today's Spending Review "will be underscored by a campaign of public service reform."

Among the details announced were:

• £470m over the next four years will go towards building the voluntary sector's capacity so that it can deliver the government's Big Society agenda. This will provide 5,000 new community organisers, and a pilot for the National Citizen Service
• of this, £100m transitional fund for to help the voluntary and community sector adjust to new public spending budgets.
• the core Cabinet Office budget will be reduced by £55 million by 2014/15
• the Treasury will see its overall budget reduced by 33% and the department's building will be shared with the Cabinet Office
• councils in England will face cuts of more than 28%, but they will have greater powers to borrow
• £1 billion will be taken from the "protected" NHS budget in England to help meet the costs of social care
• existing social housing tenants' rents will be unchanged but new tenants will be offered intermediate rents at around 80% of the market rent. Mr Osborne forecasts this will allow the building of up to 150,000 new affordable homes over four years.
• an extra £2 billion promised for social care by the end of the parliament
• the state pension age will reach 66 in 2020, four years earlier than planned
• benefits and tax credits will be replaced by a new universal credit over the next two parliaments
• total health spending will rise each year over and above inflation from £104 billion this year to £114 billion over the next four years
• the Department of Culture, Media and Sport budget will come down to £1.1 billion by 2014/15; administrative costs must be reduced by 41%, but free entry to museums and galleries will continue
• Sure Start services will be protected in cash terms and 15 free hours of early education and care for all disadvantaged two-year-olds will be introduced
• the green investment bank promised by the coalition will receive £1 billion in funding, half of what was expected and a sixth of the amount many say is needed

Shadow Chancellor Alan Johnson said the cuts were, "the deepest cuts to public spending in living memory. Today is the day that abstract figures and spreadsheets turn into people's jobs and services for the future."

What are others saying?

• Richard Hawkes, chief executive, Scope "Despite the continuing rhetoric that spending cuts will be fair the Chancellor's announcements today are anything but. Local government will lose 28% of its funding over the next four years, compared to just 14% reductions to the royal household, and this will hit disabled people and their families particularly hard."

• David Hillman, spokesman for the Robin Hood Tax campaign "These cuts are not inevitable, they are a political choice. A fair Robin Hood Tax on the financial sector would allow George Osborne to avoid the worst of his cuts. The Chancellor said today he will impose the maximum possible tax on banks, but words are not enough. As ordinary workers and families feel the pain of the cuts, he must go further than the dismal £2.5 billion bank levy. Banks can afford to pay £20 billion more a year."

• Phil Bloomer, campaigns and policy director, Oxfam "David Cameron and George Osborne deserve real credit for their promise to stick to Britain's aid promises during these difficult economic times. The coalition has taken the tough choice to prioritise the poorest people on the planet during the bad times as well as good."
• Helen Dent, chief executive, Family Action said: "Vulnerable and low-income working families will be left thinking they're the ones being left to turn around the deficit supertanker. While we welcome the extension of free childcare for two-year-olds, the measures in this spending review will have a considerable impact on families. Unfortunately many of the announcements make it difficult for work to pay and our research shows that the welfare caps will disproportionately affect couples and in some cases could cost the Treasury more. We'd hoped George Osborne would throw families a lifejacket, instead he's making it all the more difficult for them to keep their heads above water."
• Andy Atkins, executive director, Friends of the Earth "The Chancellor's pledge for £200 million to support low-carbon technologies and a new bank to help green industries get off the ground is good news - as is his clear commitment that it will be a bank not a mere fund - but it will need significantly more than the £1 billion allocated to be effective. Slashing energy efficiency grants to some of the UK's most vulnerable people will send a chill into many homes, while cutting £300 million on buses will have a devastating impact on services that the poorest people rely on most."
  
  

What next?

More detailed information about the impact of these cuts is expected to emerge over the coming weeks and months. We'll be responding to developments as and when we learn more so be sure to check back here regularly. You can also find more information on our Coping with Cuts pages, including links to a range of practical advice guides to help you plan for and manage uncertainty in the months ahead.