What does the Autumn Budget 2021 do for charities?

1. Universal Credit, Affordable Homes and the National Living Wage

• The Government pledged to cut the taper on Universal Credit – the rate at which benefits are reduced for every £1 earned above £515 a month – from £0.63 to £0.55, meaning that many individuals and families on the lowest incomes will be able to keep a greater amount of their benefits. This should ease the demand on charities working to help the 6 million people currently in receipt of Universal Credit in the UK, whether by providing food banks, refuges and homeless shelters or support for the disabled.
• The Government also pledged to invest £11.5 billion in the Affordable Homes Programme in England over the next five years, which aims to build 180,000 new homes, over half of which would be outside of London. Similarly to the above, this should ease some of the current pressure on charities providing support for individuals and families relying on affordable housing schemes.
• Changes were also announced for individuals in receipt of the National Minimum Wage. Apprentices will benefit from a raise to their wages of over 10%, and the National Living Wage will increase to £9.50 per hour. This may be a mixed blessing for charities, however, as although it may lower the demands on some charities’ services, charities which are employers will need to account for the increased cost of paying employees on the National Minimum Wage.

3. Boost for the culture sector

• England’s culture sector will receive £850 million to protect museums, galleries, libraries and local culture. This will enable the renovation, restoration and renewal of over 100 regional museums and libraries.
• It was also announced that the tax relief for museums and galleries which was due to end in March 2022 is to be extended for another two years, to March 2024. In the period from October 2021 to April 2023 this relief will be doubled. Both of these measures will be helpful for the many charities across the UK providing services in the arts sector.

4. Health and Social Care Levy

• Although announced prior to the Autumn Budget, it is estimated that the 1.25% increase in National Insurance contributions by employers (the Health and Social Care Levy) will raise an extra £12 billion to fund health and social care across the UK.
• This is likely to be welcome news for charities working to support those in care, as it should provide much-needed extra funding for the sector and ease pressure on the services those charities provide. Charities who are employers will need to budget for the one-off administrative costs of updating their payroll systems to reflect this change.

6. Civil and criminal justice

• An important measure announced for the legal sector was an extra £900 million for the Ministry of Justice in the next year, primarily to tackle the backlog of cases in the courts. Over £475 million is to be allocated to the criminal justice system and over £320 million to increase capacity in the civil, family and tribunal jurisdictions to tackle backlogs and reduce delays.
• The government has also pledged to provide more funds to increase the thresholds for means-tested legal aid, which will mean many more individuals who were previously unable to afford independent legal advice will now be eligible for support.
• Both of these measures will be welcomed by charities involved with the legal sector, including those providing pro bono legal advice, campaigning for human rights and providing support to the victims of domestic abuse, exploitation in the workplace or wrongful conviction.

If you have any queries about the topics discussed above, or there are any other issues we can help you with, please do get in touch with Laura Sherratt, Ben Brice or another member of our Charities team.