Looking to the policy year ahead

After an eventful 2024, the new year begins. There are sure to be plenty of ‘unknown unknowns’ along the way but some things we can decipher from what’s come before. Here’s a summary of some of the policy trends and initiatives that affect charities as we enter 2025. 

Prime Minister’s letter to civil society 

In what may be an unprecedented gesture, Prime Minister Keir Starmer wrote a New Year’s letter addressed to ‘all civil society partners’. In it, he says “I know this Government alone cannot deliver the change this country needs. I am therefore proud of the way we have worked in partnership with civil society over the last six months, and everything you have helped us to achieve.”  

He enumerates some policy initiatives that the government has worked on or engaged  

with civil society or social organisations so far, as part of achieving its ‘missions’, such as the Coalition to Tackle Knife Crime, the National Youth Strategy, the Expert Group on homelessness and rough sleeping, and other initiatives on housing and social care. 

It’s easy to be cynical, especially because the PM omitted from the letter any mention of the ongoing fallout from the changes to Employee National Insurance Contributions (ENICs) announced in the Autumn Budget. Without mitigation, these tax changes could cost the sector hundreds of millions of pounds at a time when finances are hugely stretched. 

However, the positive tone and repeated offers of constructive engagement mean the influencing door is open in ways it hasn’t been for many years. Charities need to capitalise on this during 2025 and beyond, and hold the government to the Prime Minister’s words at every opportunity to deliver for their beneficiaries. 

Civil Society Covenant 

In his letter, the Prime Minister also thanks people for their responses to the Civil Society Covenant consultation which took place last year, saying “I am greatly encouraged by your responses, and we will work quickly on next steps. Keeping this partnership going is critical to achieving our missions”. NCVO are currently analysing the responses, and we expect the next stage of developing the Covenant to become clearer early in the year. 

Phase two of the Spending Review 

At last year’s Budget, we learned that the Government is doing a Spending Review in two phases. This is unusual but essentially means that following the General Election, government departments had their budgets re-set for 2024/25 and set for 2025/26, with an overall ‘spending envelope’ set for the remainder of the Parliament.  

Over the Autumn and early Spring, departments will be submitting spending proposals for the period beyond 2025/26 to agree more detailed plans. The portal is open for submissions until 9 February, so don’t miss the chance to respond if a particular department or Non-Departmental Public body (NDPB) is critical for your work (for example, the National Lottery Community Fund or the Environment Agency).

This process will be hugely important for the longer-term viability of key government agencies that interact with charities, such as the Charity Commission and local governments. A difficult fiscal environment for the government is already increasing pressure for cuts. The Civil Society Group submitted a response at the end of the year, including practical legislative and policy ideas that government could do to improve the resilience of civil society and communities. 

English Devolution White Paper 

We learned more about the new government’s thinking on devolution just before Christmas when it published a 118-page white paper on the subject. This talks about decentralising power, boosting growth, and helping communities ‘take back control’ from Whitehall, but we’ll have to see whether power (and importantly, money) follow the rhetoric.  

The paper envisages more mayor-led ‘Strategic Authorities’ across England, with ambitions to rationalise the patchwork of existing arrangements and bring in ‘integrated settlements’ that consolidate budgets for “housing, regeneration, local growth, local transport, skills, retrofit, and employment support.”  

Importantly, this agenda also involves another “programme of local government reorganisation for two-tier areas” which could be disruptive and even unpopular in some areas. The Institute for Government has produced a summary of the main themes and concludes that it kicks off a “radical reorganisation of local government”. 

This agenda will take years to fully unfold, but will affect thousands of local charities and the relationships they have with their local councils. The paper will be backed up with a devolution Bill that has yet to be introduced in Parliament. 

Community Wealth Fund 

Towards the end of 2024 we learned a bit more about the Community Wealth Fund (CWF) when the government announced that out of £350m recently recouped from dormant assets, £87.5m would be earmarked for community wealth funds. Dormant assets are financial assets like bank accounts or stocks that have no traceable owner. This scheme, first introduced in 2010, has collected hundreds of millions of pounds to redistribute for social purposes.

The last government passed legislation to add the CWF to the original list of eligible recipients of dormant assets funding, alongside youth, financial inclusion, and social investment. The Community Wealth Fund Alliance has run a long-standing campaign to use these funds to support disadvantaged local areas in England.  

The government concluded a technical consultation on how a CWF might actually work last year and we’re awaiting the outcome of that. The Alliance has produced a briefing on its latest position and you can sign up to support the campaign and receive updates. 

New Charity Commission Chair 

In October the current Chair Orlando Fraser KC announced he would step down after his current term finishes in April. Having overseen the development of a new strategy and recruitment of a new Chief Executive in David Holdsworth, there will now be a process underway to appoint his successor. This will be subject to the public appointments process and should involve parliamentary scrutiny by the Culture, Media and Sport Select Committee at some point in 2025. 

Trump 2.0 

One big ‘known unknown’ for 2025 is how the incoming US administration will disrupt the global conversation and UK politics in ways we can’t foresee. Trump’s ability to drive news cycles will likely cause regular headaches for the Labour government.  

Despite Labour’s huge majority, the noise coming across the Atlantic could suck up policy and communications bandwidth which is needed to make progress on lots of things that matter for the UK charity sector (and the public), like the health service, social care, economic development, housing and the environment. 

What can charities do about this? It’s not easy, but when bullies and internet trolls demand our attention I’d say the best approach is generally not to give it to them. Charity leaders and trustees need to support their comms teams and have solid crisis-comms plans, especially if they’re likely to be more at risk of attack.  

But increasingly, it seems that online disinformation pushed by rich and powerful people is leading to negative consequences for ordinary people in the real world, including charity staff, volunteers and beneficiaries. At some point, it’s going to need a more strategic response. 

Charities must stay true to their values, and stand up for beneficiaries’ needs if they come under attack. But we also need the Charity Commission, law enforcement, politicians and governments to defend our civil society organisations from threats to their independence and safety.