What does Budget 2021 mean for small and local charities?


The Budget comes at a time when small charities have been playing a crucial role in helping those most affected by coronavirus. The #NeverMoreNeeded coalition, which we’re part of, had called on the Chancellor to support charities to continue their vital role in responding to the pandemic, backed by more than 1000 charities in the #RightNow campaign. However, disappointingly, there was very little in the Budget of note for charities. 


While the Chancellor extended a number of existing support measures for businesses – such as the furlough scheme and cuts to VAT for hospitality, as well as a new ‘Restart’ grant for shops and hospitality – these measures will benefit few of the charities we work with.


There was some funding announced for tackling domestic abuse - £15 million in support of perpetrator programmes, which has been welcomed by partners such as the Drive programme – as well as £4 million for ‘respite rooms’ to support homeless women. £10m has also been committed for mental health projects supporting veterans.



Over the last few months, we’ve been one of many organisations backing the #KeepTheLifeline campaign, calling for the £20 uplift to Universal Credit, introduced at the start of the pandemic, to be made permanent. It’s disappointing that the Chancellor announced that this would end after 6 months, risking leaving many people at risk of falling deeper into poverty right at the time that other measures such as the furlough scheme are set to end.


Those on legacy benefits, many of whom are disabled, sick or carers, have continued to be excluded from this uplift. The Government have also brought forward a measure which was planned to begin in October, which will see the maximum level of deductions from Universal Credit reduced from 30% to 25%, beginning in April.  


Place-based funding

A new Community Ownership scheme was announced, allowing community groups to bid for up to £250k matched funding to buy local community assets such as sports clubs, pubs or theatres. There was also further detail on the Government’s already announced Levelling Up Fund – while it does include community spaces amongst the examples of what can be bid for, there’s little else of relevance to the charities we support, and charities are not even included in the list of potential stakeholders. The politics in accessing this fund are also likely to be fraught, with MPs playing a role in prioritising a bid from their local area. There’s also a Community Renewal Fund – which is the pilot testing phase for the Shared Prosperity Fund (the Government’s long-awaited replacement of EU funding) which will support local responses to issues such as unemployment, but bids will be made through a lead local authority. There’s a summary of each of these place-based funds from New Local here.

What this means for small and local charities

On the whole, it’s disappointing that the Budget fails to recognise the vital role that charities have been playing in supporting communities through the pandemic and beyond – at a time when much of the emergency funding announced last year is due to run out. As our Value of Small in A Big Crisis research shows, small and local charities have shown up and stuck around for people when they needed it most over the last year – and they will play a central role in supporting communities to recover and build back stronger, but they need support from the government to realise these ambitions. You can read more here in the #NeverMoreNeeded campaign’s joint response, as well as reactions from other charities. 


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