Matt Whittaker, CEO of Pro Bono Economics, said:

“The Chancellor was keen to emphasise optimism in his Budget speech, but it would be more accurate to say that the OBR has delivered cause for reduced pessimism. While the outlook for the UK economy is less bleak than the one set out last autumn, it remains the case that household incomes have not yet reached the end of what is set to be the sharpest two-year drop on record. Inflation is falling, but continues to outstrip earnings growth for the moment. Rising unemployment and increased borrowing costs will mean household budgets will continue to come under significant strain in the months to come.

“Charities play a vital role in supporting households through these choppy economic waters, as the Chancellor recognised today. The number of people referred by Citizens Advice to charitable support and foodbanks rose again in February, meaning the monthly figure is three times as high as it was at the start of the pandemic.

“Yet, while demand swells, charities inevitably have to cope with falling income as people have less to give and government funds are stretched. Based on today’s OBR figures, we estimate charity income will decline by £800 million in real terms by the end of 2023/24. The Chancellor’s announcement of £100 million for civil society organisations across England, alongside the funding boost to suicide prevention charities and leisure centres, is a very welcome step to plug part of the funding shortfall. To deliver the best bang for its buck and ensure that money has long-term impact, the government should prioritise investment in the charity sector’s skills, infrastructure, adoption of technology and energy efficiency. Investment in these areas is key to strengthening civil society and the role it plays in boosting our economy.

“At the heart of the plan for tackling anaemic growth laid out by the government today were new approaches for increasing the supply of labour. Charities and community organisations play a unique role in the ecosystem of support available to those outside of the workforce. There is a clear imperative for policymakers to explore the evidenced solutions to this challenge provided by the voluntary sector, which is also a major employer of older workers, women and people with disabilities.”