Chancellor announces key dates for big spending decisions

On Monday 29 July, the new Chancellor Rachel Reeves made a statement to the House of Commons about the state of the public finances.

Much of the media coverage was about her assertion that the previous government had not been honest about the state of the public finances, and that there was a ‘£22bn black hole’ in the books which needed to be urgently addressed. 

But she also revealed some key dates and sequencing for big decisions to come over the next nine months, which people involved with charities and voluntary organisations will want to take note of, because they will affect the future budgets of central government departments, local governments, and key agencies for the sector like the Charity Commission. 

We now know that the new government’s first Budget will take place on 30 October, just three months from now. The Chancellor has formally commissioned the Office for Budget Responsibility to carry out its economic forecasts to inform the Budget that she will present at that time.

Timing of the Spending Review clarified 

The statement also confirmed ‘launch of the next Spending Review which will settle 25-26 budgets alongside the Budget and conclude the multi-year Spending Review in spring 2025’. This refers to multi-year financial plans that the government, in pre-pandemic times, usually carried out at regular intervals. For the past few years this process has been erratic and often short-term, causing difficulty for financial planning across government and particularly for local government. The Spending Review will be announced alongside another Budget in the Spring. 

In practice this means that government departments and agencies like the Charity Commission will now be working up their proposed budgetary plans for the years up to and including 2026, to submit to the Treasury. There will be a process of negotiations behind the scenes with the Treasury from now until the spring, at which point the Chancellor will present the sum total of all the spending for all of central government (including what it provides to local government) for the next few years. 

In a sense this is good news, because it should hopefully bring some stability. On the other hand, the relentless message from the new government is that spending will be very tight and all expenditure will have to meet a very high bar to be justified. For charities, the parlous state of local government finances has a big impact on their operating environment locally and we will need to watch how the government addresses this carefully. 

The Charity Commission’s budget 

Another aspect to keep a keen eye on is what happens to the Charity Commission and its budget over the coming years. It was cut massively in the early 2010s, leading to large staff layoffs and reductions in activity and expertise, but then it slowly recovered to a degree later in the decade. But there are big questions about what resources it will have after the Spending Review and how that will affect the implementation of its new strategy, launched earlier this year. This won’t get any media attention outside of the sector press, but it’s critical for the effective governance of hundreds of thousands of organisations and charity trustees. 

The Commission’s strategy lays out five key areas of focus, which I explored in a previous piece here. It includes lots of good points about investing in staff expertise, using innovative approaches, and doing more with data and new technology. 

Collectively, the charity sector needs to help make the case to government for keeping the Commission’s budget from being cut in real terms, as a minimum. But I’d also argue that there’s an ‘invest to save’ argument to make to the Treasury. The Commission needs sufficient resources to provide the right guidance and support for charities and trustees, so they don’t get small things wrong which then turn into big expensive problems, requiring investigations and lawyers. 

There’s also an argument to make about data and transparency. More investment in the register of charities and making all the data that charities are required to provide more transparent to the public, could in theory help better self-regulation and public awareness, and over time potentially contribute to fewer expensive investigations and enforcement actions. 

These may be nuanced and difficult arguments to make to a government in penny pinching mode, but I think we have to try. 

Learn more about the Budget, Spending Review, and what the charity sector is calling for at our Engage conference on 17 October. Reserve your place here!