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Support for the sector announced in Budget

22 April 2009 

Building on February’s £42.5m Action Plan to help support the third sector in recession, today’s Budget announced new support for the sector and for those who rely on the sector’s services during the recession. This includes:

• A new Hardship Fund for the sector, worth over £16m. This new money will be targeted at third sector organisations providing front line services that have been hit by the recession – either by seeing an increased demand for their services by experiencing cash flow difficulties. 
• Government also announced that OTS will consult by the summer on the design and functions of the Social Investment Wholesale Bank. By working with existing investors and lenders at the retail level, a Social Investment Wholesale Bank would aim to increase the supply of investment in the third sector, and strengthen demand for finance and develop the social investment market. The OTS will report back with substantive proposals following the consultation. This takes us one step closer to making the Social Investment Wholesale Bank a reality and getting more investment in the good work the sector does.

Further details on both these announcements will be available on this website shortly.

Also, as part of a £1.2bn package that will mean from October 2009 all 18–24 year olds who have been claiming JSA for 12 months will be guaranteed 6 months of meaningful activity, either a job, a work placement or work related skills training, Government will provide funding for Local Authorities and voluntary sector partners to take forward the creation of 100,000 new jobs in socially useful activity. It is expected that 10% of these will be green jobs. The guarantee will also offer new training courses, and Community Work placements.

The Government has considered responses to its consultation about anti-avoidance rules around substantial donors to charity. The Budget announced that there would be further informal consultation with charities to develop new rules based around an effective anti-avoidance purpose test. The Government aims to bring forward proposals at the 2009 Pre-Budget Report, with a view to legislating in 2010.

The Budget also recognises the importance of Common Investment Funds and Common Deposit Funds to the charitable sector. The Government will consult shortly in conjunction with the Charity Commission on ways to bring these funds more fully under the FSA’s regulation whilst preserving their existing tax reliefs.

Further details on today's Budget announcment can be found on the HM Treasury website:

• HM Treasury [external website]