There’s rarely a dull budget, and the first (and last) spring statement from chancellor Philip Hammond has predictably dominated the headlines over the last few days.
Despite being billed as a relatively minor update, two decisions in particular managed to swallow up a considerable amount of headline space. The reduction of the tax-free dividend allowance from £5,000 to £2,000 next April was joined on the front pages by an increase in Class 4 National Insurance contributions (NICs) for the self employed.
Despite claims that the chancellor might be about to make a manifesto U-turn, the changes were largely condemned as an unfair tax on the self-employed and placed even greater scrutiny on the budget’s ability to support small business growth.
So, what does the budget mean for small businesses and, in particular, social enterprises? Now that the dust has settled (a little), we’ve decided to save you some time by picking out the stuff that matters if you’re a small business owner operating in the social space.
The good news? It isn’t necessarily all bad news!
There is to be an extra £2bn set aside for social care over the next three years, in addition to a green paper that will focus on the future of the sector.
While this sounds like good news, experts are urging social enterprises operating within the care sector to tread with caution, due to the government’s tendency to react belatedly to community requests of this nature. We’ll leave you to decide on the legitimacy of those concerns, but there’s no doubting that such funds would go some way to helping businesses create opportunities and reduce inequalities in social care.
The chancellor announced a £320m fund for new free schools, which can be set up by charities, parents and community and faith groups. This is potentially very positive news for a burgeoning social enterprise sector that has a significant number of budgetary-related challenges to overcome.
In an effort to rid contracts of misleading small print, the government will publish a green paper that investigates ways to protect consumers from unnecessary costs that arise from confusing terms and conditions.
Aimed at the businesses that are deemed to strategically overlook honesty and fairness within their contracts, this is potentially great news for the social enterprise scene, which is built solidly on an equal footing with the consumer.
Business rates relief
There will be a £300m discretionary business rate relief fund given to local authorities and intended to be used for supporting businesses most affected by the business rates relief revaluation.
The exact distribution of that £300m figure remains unclear, and many experts within the social enterprise realm are now calling for these funds to be focused on the businesses that offer the most sustainable environmental and social value.
Tackling the skills gap
The chancellor announced ’T-Level’ qualifications that will be aimed at raising the status of technical education in a bid to close the much-hyped skills gap in the UK.
Slated for launch in Autumn 2019, T-Levels will be for 16 to 19 year-olds seeking technical studies and are set to include a 50% increase in training hours, along with a three-month work placement to ensure work-readiness.
The skills gap is a tangible problem in the social enterprise sector, much as it is in most walks of business life, and the introduction of T-Levels might just provide the technical skills-boost so many enterprises yearn for in the digital age.
Digital infrastructure improvements
After a brief nod twoards digital infrastructure improvements in last year’s Autumn Statement, Hammond has now confirmed that there will be £16m made available to help create a new 5G mobile technology hub. This is joined by plans to offer a £200m fund that will facilitate local projects building fast, reliable, full-fibre networks across the UK.
Modern social enterprises rely on solid digital infrastructure to remain productive and capable of conducting business while on the move. The speed with which 5G arrives and the areas likely to enjoy coverage remains to be seen, but the emergence of funds set aside for such improvements is still encouraging for the digital social economy.
Tell us what you think!
How do you expect the budget to affect your social enterprise? Tell us what you think by getting involved in the comments section, below!