The 2021 Budget – opportunities for the VCSE sector

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The Small Charities Coalition has scrutinised the recent government budget to highlight some potential opportunities for charities. The context for this budget was of course rooted in the immediate and long-term fallout from the COVID pandemic, and therefore directed very much towards supporting businesses and commercial enterprises to recover.  

There was very little mention of local government finances, an important source of funding for many charities. There appears, says the Small Charities Coalition, to be a ‘misled belief’ amongst ministers and civil servants that charities can simply raise funds from other sources and survive without direct investment from government. Realistically, those organisations who have transitioned to being a Community Interest Company (CIC), or have a trading arm, may find better prospects in the budget’s support packages. 

There are only six specific references to charities in the Budget document, subtitled ‘Protecting the jobs and livelihoods of the British people’.  Three references are in the context of armed forces charities, with two referencing the previous £750million. The sixth is about charities that produced Personal Protective Equipment (PPE) at the start of the pandemic. The Small Charities Coalition describes this as a ‘bitter blow...that charities remain one of the few sectors still excluded from extended packages of support’.  

Highlights and opportunities


The government is extending furlough for a further five months from May until the end of September 2021. Employees will continue to receive 80% of their current salary for hours not worked. There will be no employer contributions beyond National Insurance contributions (NICs) and pensions required in April, May and June. From July, the government will introduce an employer contribution towards the cost of unworked hours of 10% in July, 20% in August and 20% in September.  

For VCSE organisations working with self-employed contractors, the eligibility for those able to access government support has expanded to include those who registered as self-employed just before lockdown. 

New money 

There is very useful information in the Budget about money that individual government departments will have and how much of that will be spent on COVID.  

VCSE organisations supporting NHS test and trace and vaccine mobilisation could consider how their local health provider networks are managing additional funds and if there is an opportunity there for additional funding. 
£8 billion is earmarked to help local authorities in England respond to the pandemic in 2020-21, on top of £1.6 billion provided in 2019-20.  VCSE organisations providing food parcels and possibly counselling and befriending services should be talking to their local authority about any additional financial support they can access. 
£14 billion is allotted to keep the country’s transport networks moving. If your organisation runs a community transport service, it’s worth talking to your local council about what additional support they may be receiving that they may be able to pass along. 
If you are a CIC it is worth signing up to the Help To Grow programme which will be providing specific support to 100,000 small businesses.

Business rates

Some organisations may be able to take advantage of additional support via Business Rates, which will continue to provide three months 100% holiday, nine months 66% relief with cap.  

State benefits  

  • The Universal Credit £20 increase will be maintained for a further six months 
  • There will be an additional £500 one-off payment for those on working tax credit 
  • The national living wage will go up to £8.91 in April  

There is a big focus in the budget on getting people into work and improving their life chances whilst at work. If your VCSE organisation is working with employability, it might be worth contacting your skills lead at the local council to find out what they have planned and how you could be involved. 

Domestic abuse  

There will be more funding to tackle domestic abuse. VCSE organisations working with domestic abuse victims may want to talk to local commissioners to find out what they plan to do with the additional funding. 

Regeneration activties 

The budget also referred to several physical infrastructure projects. This might be worth reviewing to see how the spin-offs from large scale physical regeneration could benefit your charity. 

Levelling Up Fund 

The government also announced the launch of the Levelling Up Fund prospectus.  This is about infrastructure that improves everyday life, such as town centre and high street regeneration, local transport project, and cultural and heritage assets. Applications will need to be supported by your local MP.   

Community Ownership Fund  

Community groups will be able to bid for up to £250,000 matched funding to help them buy local assets to run as community-owned businesses. In exceptional cases up to £1 million of matched funding will be available to help establish a community-owned sports club or buy a sports ground at risk of loss from the community. This will help ensure that important parts of the social fabric – like pubs, sports clubs, theatres and post office buildings – can continue to play a central role in towns and villages across the UK.  
You can read the full budget review from The Small Charities Coalition here