The Emergency Budget:What does it mean for sporta members?
The Emergency Budget: What does it mean for sporta members?
Like most sectors of society, sporta’s cultural and leisure trusts, along with other social enterprises will feel the effects of the Coalition Government’s Emergency Budget. Working with our associated organisations sporta will be closely engaged with how the budget measures will affect the future of trusts and all members’ interests, as these measures are worked through to implementation.
Several aspects of the Budget announcements are in themselves significant, but their full impact will be only seen as they combine with the policy changes which the Coalition Government has announced that they are developing – especially in their aspiration to devolve greater power to local communities.
The particularly significant measures include:
- the 25% cuts in departmental and public sector budgets. The detail of these will be decided in the autumn following a period of public consultation. Whatever the detailed decisions are, the expenditure reductions will have a huge impact on a whole range of unprotected public services.
- the increase in VAT to 20% from 4 January 2011 will affect consumer spending and will also increase the cost of private sector service providers to local authorities.
Social enterprises were not referred to specifically in the Budget. However, the Chancellor announced that the public spending review would be held on 20th October 2010 and one of the aims of this is to;
“start a period of external engagement between the Government and all parts of society including; the private sector, the general public, voluntary/charitable organisations and experts, in order to obtain the best ideas from those most involved in and affected by public services” (HM Treasury press release– 8 June 2010)
The Spending Review aims to be a complete re-evaluation of the Government’s role in providing public service. sporta will be canvassing its members for comments on the Budget and forthcoming Spending Review.
Budget Details
The full Budget document including an executive summary is at
http://www.hm-treasury.gov.uk/junebudget_easyread.htm
The Chancellor, George Osborne, spelt out his plans to save £85 billion in the next four years with his radical increase in VAT to 20%, changes to disability and housing benefit and tax breaks for new and small businesses. Osborne said this ‘early determined action’ was “unavoidable” and aimed to protect the most vulnerable in society.
The Chancellor said that cuts in public spending would amount to 77% of the deficit reduction, leaving just 23% to carry the burden of tax increases. This included a reduction of government departmental costs (excluding health and international development) by around 25% over four years. The result would be a reduction in government borrowing from £149 billion to just £20billion in 2016, creating a surplus in the following years.
Release Date: 02/07/10