Matt Whittaker, CEO of Pro Bono Economics, said:

“With the country now in recession, living standards are set for the biggest hit on record. Surging inflation, spiralling borrowing costs and rising unemployment mean household budgets will come under severe strain. As has been the case throughout the cost of living crisis, the demand for charity support will be substantial.

“The government has taken important steps to protect the most vulnerable in the Chancellor’s Autumn Statement, but benefit uprating will not kick in until the spring and timelines for additional payments are still unclear. Charity demand is already rocketing and will only intensify as we head into winter. Given the enormous pressure on public spending and household budgets, charity income will inevitably dip as people have less to give and government funds are stretched.

“Based on these OBR figures, we estimate charity income will decline by £2.2 billion in real terms by the end of 2023/24. This all comes on the tail of unprecedented upheaval resulting from the pandemic, which has seriously weakened the charity sector’s resilience and ability to cope with increasing pressures from inflation.

“Through the worsening economic headwinds in the coming months, charities will continue to support the most vulnerable and aid those left stranded by public service backlogs and delays. But the sector will need strategic investment now and in the long-term to weather this storm and future crises.

“The sector’s potential as a partner to government should also not be ignored. Given the vital role that charities play in getting people back to work, government will benefit from close engagement with the sector in its review of economic inactivity. It is also important the sector is engaged with the Energy Efficiency Taskforce, especially considering the challenges faced by smaller community groups in investing in energy efficiency.”


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