Chris Cowcher, Head of Policy and Communication has reviewed the Chancellor’s Autumn Statement to summarise what is relevant to our sector.

As always, the Government’s delivery of a Budget Statement will be viewed in the context of what can be gained politically. Will the announcements made earlier this week improve the current polling figures for the Conservative Party, will any flaws in Labour’s economic strategy have been exposed and how can the other major parties in Westminster differentiate their views on tax and spending from those announced by the Government. It was very apparent that the 2023 Autumn Statement was very much so laying the groundwork for an impending General Election, which is expected to happen next year.

Everyone will have different views on the 110 measures included in Jeremy Hunt’s statement to the House of Commons, here is Chris’s summary in four digestible sections of the most relevant parts for community businesses.

The pre-released information about a rise in the National Living Wage should be seen as a welcome measure, in terms of supporting those on lower incomes. Furthermore, the cuts to National Insurance (NI) aims to keep event more money in staff pockets in 2024. However, the impact of the costs of incurred for businesses did not appear to have been universally considered in line with these personal benefits. The NI cuts, for example, were very much targeted at individuals, with businesses seeing no changes in their own contributions.

Our recent “Community Ownership: A Better form of Business” report showed that community-owned businesses have continued to put people first, despite the challenges they have faced.

Last year nearly two thirds of businesses absorb price rises so that their products and services remained affordable for customers. Also, over half of all businesses provided a minimum 5% cost of living pay rise to their staff. More concerningly, the research also highlighted that as many as 1 in 3 businesses are concerned about the next 12 months, with as many as 91% stating that inflation, rising prices and staffing costs were negatively impacting their operation.

The increased energy price cap, coming just days after the budget, adds to these pressures for businesses.

The announced extension of the Retail, Hospitality and Leisure business rates relief was one of the true positives that can be taken from Wednesday’s event. This will mean that eligible community-owned businesses will continue to receive a 75% rate relief until April 2025. Some will argue that longer term reform of business rates is still needed, but any future decisions must be made in line with the capacity of local government and their ability to continue applying discretionary reliefs to businesses in their authority area.

The announcements around VAT relief for the use of Energy Saving Materials (ESM) in premises used solely for charitable purposes was also good to see. We are delighted that our partners ACRE, and the network of village and community buildings they support, will directly benefit from this announcement. We would argue that community-owned businesses, specifically those that have adopted the community benefit society legal form – with open membership, democratic control and an asset lock – should also be eligible for support.

Our Better form of Business research showed that as many as 85% of businesses have already or are currently installing ESMs. Not only would VAT relief be meeting an interested demand, incentivising investment in ESMs would be hugely positive for our sector – not just in terms of reducing running costs of for businesses but also in terms of taking action on climate change.

Looking at the workforce more widely, whilst the ‘Back to work’ sections of the budget statement have rightly faced days of scrutiny in relation to the relative impact on those with physical and mental disabilities, there were some aspects of the announcements which may be of interest to our sector.

Plunkett has recently been engaged in conversations with local DWP offices about the opportunities for work experience and volunteering. Previous evidence that we have published, has shown that the network has often created employment for those facing marginalisation the labour market. Plunkett would be keen to explore the opportunity to work with Job Centres, in relation to employment experience – both at our own head offices, in Woodstock, Oxfordshire but also amongst community-owned businesses in different areas too.

In other announcements which could impact the community business sector, the planning system performance reforms, which will potentially enable accelerated decisions for larger scale developments in England, could present future opportunities for new community businesses as part of new infrastructure delivered alongside housing. Plunkett will continue to advocate for the use of community-owned businesses within developments as a way of supporting integration of new and existing residents. In this context, community businesses will provide access to vital facilities and services, as well as volunteering employment opportunities, which have been prioritised by the community which owns the business. The work we have been doing with Thakeham, at their Woodgate site is a pilot for this model.

Chris Cowcher, Head of Policy and Communications at Plunkett Foundation said:

The reality for many businesses is that they need more support than what was on offer this week. As always, Plunkett remains available to offer support and advice to community-owned businesses UK-wide. We will also work with our membership to make the case for more direct measures in the Spring Budget, otherwise we fear that the challenges currently being faced may become terminal for some businesses.

To find out more about our advocacy activity please do get in touch with Chris, via chris.cowcher@plunkett.co.uk.

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