North charity cut figures could just be the "tip of the iceberg" - Shadow Civil Society Minister

Responding to the False Economy survey showing that charities and local voluntary organisations in the North East and Cumbria face cuts of over £13m in funding, Roberta Blackman-Woods, Labour's Shadow Civil Society Minister and MP for City of Durham said:


"We are already seeing a huge withdrawal in support for voluntary and community organisations as a result of the Government cuts. Today's research reveals the scale of the impact Lib Dem- Tory Government ideology is having on the charitable sector at a time when demands for services are higher than ever."


"This survey is just a snap shot of the many stories I'm hearing from charities and voluntary groups across the North East. The figure for the region of £13m could just be the tip of the iceberg when it comes to the real extent of the cuts hurting our local charities. Local councils in the region are facing unfair funding cuts on a huge scale and as a result, the funding available for local groups and charities is being squeezed.


"The Government is big on rhetoric and has ceaselessly promoted its ‘Big Society' agenda but it is clear that cuts of this nature are completely at odds with this message.


"Forcing local authorities to make such extensive cuts to the charitable sector will only hinder the delivery of the Big Society programme and suggest that the Government is not fully committed to its own ideas or investing in the voluntary and community sector in the long-term.


"Our local charities and voluntary groups play a vital part in the life of the region. These reckless cuts are going too far, too fast and are threatening the future of many local charity and voluntary organisations. The Government needs to look urgently at the effect their ill-thought-out policies are having on the voluntary sector and the communities it serves."


Labour is today calling on the Tory-led Government to conduct a comprehensive review on the impact of their plans on charities and local voluntary organisations.  This comes as a survey suggests that more than 2,000 charities and communities groups are facing budget cuts as a result of reductions in their funding.


Harriet Harman MP, Labour's Deputy Leader and Shadow Deputy Prime Minister, said:


"The Tory-led Government say they support the Big Society and voluntary organisations. Many of these organisations took years to establish.  We don't want them wiped out.  We're challenging the Government to do a review now before it's too late.


"We cannot have a situation where local services, local jobs and a whole network of volunteers that these community groups are at the centre of are threatened. That will be of real concern to communities all around the country.


"And this survey just scratches the surface of the challenges facing our charities - it is even worse when you take into account the millions of pounds lost as a result of the VAT rise, and of cuts to charities from the Tory-led Government. We still do not have a complete picture of the impact of the Government's actions.


"That's why we're today calling on the Tory-led Government to carry out a thorough and comprehensive review of the impact on charities and local voluntary organisations of their plans.


"The Government must produce a report on this in time for the House's return in September and own up to what is happening, and change course to preserve these crucial organisations."



Editor's Notes:


1.A survey from False Economy has found that more than 2,000 charities and community groups are facing budget cuts as local authorities reduce their funding. The survey found that councils across the North East and Cumbria expect to cut funding by over £13m:


It is believed that these figures simply scratch the surface of local authority cuts as a number of the country's largest local authorities have not yet responded to the information requests including Newcastle City Council, North Tyneside Council and Hartlepool Borough Council.


2. ACEVO (Association for Chief Executives of Voluntary Organisations) have estimated that if local government were to pass on their cuts proportionately to the Voluntary Sector, the total impact would be £650 million this year.


3. The Tory-led Government will still be netting an extra £225 million in tax from charities this year, and £125 million in 2012/13.


4. In a letter to George Osborne, Sir Stuart Etherington, the Chief Executive of NCVO (National Council for Voluntary Organisations) has estimated that "the end of transitional relief on Gift Aid in April 2011 will cost the sector at least £100m; and the increase in the main rate of VAT to 20% will cost the sector an estimated additional £150m per year."


5. The Budget estimates that the cost to the Treasury of changes to Gift Aid and Inheritance Tax allowances for charitable donations will be £25 million next year and £125 million the year after. Budget Red Book, p.43, items 50 and 51.


6. ACEVO (Association for Chief Executives of Voluntary Organisations) have estimated that charities face public sector cuts of £900 million this year, and £2.85 billion per year by 2014/15, and that the total impact of decisions on tax and spend will mean a loss of funding to charities of £1.14 billion this year and £3.1 billion per year by 2014/15.