News Alert

 Spending Review

• The government plans to spend £470m over the next four years building the capacity of the voluntary sector to deliver the Big Society, it announced in the Comprehensive Spending Review. Within this allocation will be a one-year, £100m transition fund to help voluntary sector groups adjust to new public spending budgets.
• Chancellor George Osborne said the £2.6bn Cabinet Office budget would be reduced by £55m by 2014/15 but there would be additional money to support the Big Society by building the capacity of the sector and funding new community organisers. Funds will also be made available to pilot the National Citizen Service and set up a Community First Fund to support local and community organisations.
• The CSR report stated: "The reforms underpinning the Spending Review represent a significant increase in the opportunities and funding available to the voluntary and community sector in the medium and longer-term.
• The Review also stated that the government would pay and tender for more services by results rather than be the default provider, and would look to set proportions of specific services that should be delivered by independent providers, including voluntary sector groups. "This approach will be explored in adult social care, early years, community health services, pathology services, youth services, court and tribunal services, and early interventions for the neediest families," the report said.
• It also confirmed that the Big Society Bank would receive all dormant accounts cash, and that government would "work with the financial sector, the voluntary sector and community groups to develop innovative equity investment opportunities in public services".
• Museums and other cultural institutions will be permitted more flexible use of money they raise independently and will be able to establish trust arrangements that enable them to generate more funding from private sources. Further details of the government review of ways to increase philanthropic giving will be announced later this year.
• The government promised that to maintain the momentum for reform, and consult further with public sector staff, citizens and communities on how to deliver better services, it would publish a reform White Paper early in the New Year, setting out further detail on these policies.
• Overall, the Chancellor said that cuts to departmental budgets averaged 19 per cent, which was less severe than the 25 per cent expected and down to bigger savings from the welfare budget.
• Local authorities will see their budgets cut by 7.1 per cent each year for the next four years. Both the NHS and the schools budget will increase and there is an extra £2bn allocated to social care over the four-year period. Up to 500,000 public sector jobs could be lost by 2014-15 as the result of the cuts, according to the Office for Budget Responsibility.
• Funding for Department of International Development (DfID) will grow from £7.8bn this year to £11.5bn by 2015. It represents an increase to 0.7 per cent of gross national income from 2013, in line with the UK's international commitments to helping poorer countries. As part of the new deal, DfID will face greater scrutiny on its spending with the setting up of a new independent commission on aid impact which will assess all of DfID's spending to ensure value for money. DfID will also ensure back-office costs account for only 2 per cent of total spending by 2015, close its programmes in China and Russia and phase out the Development Awareness Fund in order to redirect money to programmes combating poverty. Further, DfID will receive funding as part a new settlement of the Conflict Pool - a tri-departmental fund for DfID and the Ministry of Defence to help prevent conflict and support post-conflict stabilisation. The fund will grow from £229m to £309m by 2014/15. The government has said Britain's international development policy will focus more on boosting economic growth and wealth creation.
• At a glance: Departmental spending cuts and their effect on the sector go to http://www.civilsociety.co.uk/finance/news/content/7589/at_a_glance_departmental_spending_cuts_and_their_effect_on_the_sector