Following the 2021 Budget announcement on 3rd March 2021, we’ve rounded up some of the key highlights and resources for understanding the UK Government’s plans for spending and taxes, plus analysis from some of the UK’s leading think tanks.
What is the budget and why is it important?
The Budget sets out the UK Government’s plans for changes to taxation, changes to spending on public services and it includes updated economic and fiscal forecasts. The Institute of Fiscal Studies (IFS) has produced a number of short videos giving background to the Budget and what to expect, watch on YouTube here.
Budget 2021 Highlights
Announcements by the Chancellor included:
– Extensions to Furlough support, and the Self Employed Income Support Scheme
– The £20 a week uplift to Universal Credit will be continued for 6 months
– National Minimum Wage increase confirmed
– VAT cuts for hospitality & tourism sector extended into 2022 and new ‘restart’ grants available to assist high street businesses.
– Stamp duty land tax holiday extended until June 2021.
– Increase in taxes including raising Corporation Tax to 25% (from April 2023), with low-profit
– Personal allowance, basic and higher rate income tax to be frozen at April 2021 levels, pensions lifetime allowance frozen at current level.
– Commitment to funding frontline health services and local authorities in responding to pandemic
Budget 2021 highlights for the Third Sector
– Extensions to the cultural recovery fund to support arts venues and the Film and TV Production Restart schemes, plus further funding for national museums and cultural bodies
– Extensions to the Business Rates holiday until June 2021, then discounted rates until the end of the year.
– Commitment to additional funding for domestic abuse services, armed forces charities and veteran’s mental health services.
– Social Investment tax relief extended for two years
– New funding schemes announced to support local areas and communities in need including Community Ownership Fund and Levelling Up Fund.
– More information released about the UK Shared Prosperity Fund and a new preparation fund – the UK Community Renewal Fund.
The full Budget and supporting documents can be viewed here.
Budget 2021: the analysis
The IFS released its initial response to the Budget, stating that while it addresses the challenges of supporting economic recovery from the pandemic in the short term there is still work to do in fixing the longer term public finances, and there is a lack of policies dealing with inequalities in society that have opened up over the last year. Read the full IFS analysis here
The Resolution Foundation has provided their assessment of the Budget, welcoming short-term crisis support measures lasting beyond the public health restrictions and much bigger fiscal support for the economy than expected, but again much less for lasting recovery, leaving the poorest households at risk and increased pressure on public services such as social care. Read the full RF analysis here.
The Joseph Roundtree Foundation focuses on what the Budget announcement means for poverty in the UK, with its analysis concluding the ‘levelling up’ measures will provide small-scale interventions for some local areas, however unlikely to provide a long-term strategy to address regional inequalities. Read the full JRF analysis here.
Supporting the Third Sector through COVID-19
A series of documents and updates regarding the 2014 to 2020 European Structural and Investment Funds Programme and the response to COVID-19 can be accessed here.
As ever, our dedicated CSI Representatives are here to understand and unpack the issues that the third sector is facing within the current ESIF programme which are affecting their ability to use European funds effectively.
So that we can raise these issues at government level on your behalf and pro-actively work for solutions, we’re asking Third Sector organisations to tell us their experiences using these funds, in light of the outbreak of COVID-19. Please contact us via email@example.com