The Headlines for Charity Sector

📈 Funding Increases

• Youth Services Fund: +£180M over 3 years
• Community Energy: +£95M for local projects
• Levelling Up Fund Round 4: £1.2B announced
• Digital Inclusion: +£40M for skills programmes

📉 Cuts & Freezes

• Arts Council: -3% real-terms cut (£12M)
• Local Authority grants: Frozen at 2024 levels
• Heritage Lottery: -£8M reallocation
• Adult Social Care: No new innovation funding

What This Means for Your Funding Strategy

1. Youth Services: Immediate Opportunity

£180M increase specifically targets youth employment, mental health, and community engagement. Money flows from April 2025.

Action Steps:

• Youth-serving organisations: Prepare applications now
• Focus on 16-24 age group (NEETs priority)
• Employment/skills pathways most competitive
• Partnership applications encouraged

2. Arts Organisations: Brace for Competition

3% Arts Council cut means fewer grants available. Success rates will drop from ~25% to ~20-22%.

Adaptation Strategy:

• Diversify away from sole Arts Council dependence
• Emphasize social impact alongside artistic merit
• Explore community/health funders for arts-based interventions
• Build earned income streams faster

3. Levelling Up Fund Round 4: £1.2B Available

Focus on infrastructure, community facilities, and economic regeneration in priority areas.

Category	Allocation	Who Can Apply
Transport & Connectivity	£480M	Local authorities (lead), charities (partners)
Regeneration & Community	£420M	Charities, social enterprises, LAs
Cultural & Heritage	£300M	Heritage orgs, cultural venues, communities

4. Local Authority Freeze: Indirect Impact

With LA grants frozen, councils will reduce community grants budgets by estimated 5-8%. Local small grants harder to access.

Tax Changes Affecting Donors

Budget includes changes to Gift Aid and charity tax reliefs:

Gift Aid threshold: Increased to £30 (from £20), simplifying small donations
Payroll Giving: New employer tax incentive could increase workplace giving 15-20%
Social Investment Tax Relief: Extended 3 years, benefiting social enterprises

Dormant Assets Scheme: £800M Confirmed

Long-awaited confirmation: £800M from dormant bank accounts released for social causes over next 5 years.

Priority Themes Announced:

• Financial inclusion and debt advice (£240M)
• Youth services and opportunity (£180M)
• Community wealth building (£150M)
• Social investment infrastructure (£230M)

Distribution starts Q4 2025 through National Lottery Community Fund and Big Society Capital

Immediate Action Plan

This Week:

Review your current applications—do they align with new priorities? Pivot messaging if needed.

This Month:

If you serve youth, prepare applications for new £180M fund. If arts-dependent, diversify funder pipeline.

Next Quarter:

Position for Dormant Assets scheme. Financial inclusion and youth opportunity organizations: prepare evidence base now.

Long-Term Trends

This budget continues clear patterns:

✓ Youth investment priority: 4th consecutive year of increased youth spending
✓ Infrastructure over services: Capital/regeneration favored vs ongoing delivery
✓ Levelling up sustained: Geographic inequality remains policy priority
✓ Arts squeeze continues: Cultural funding declining in real terms
✓ Green shoots paused: Major environmental commitments deferred to autumn

Conclusion

Spring Budget 2025 creates clear winners (youth services, levelling up areas, community energy) and losers (arts, local authority grants). Strategic organizations will pivot quickly to align with new priorities while maintaining mission integrity.

Key Takeaways

✓ Youth services: +£180M opportunity (immediate action needed)
✓ Arts Council: -3% cut means lower success rates
✓ Levelling Up Round 4: £1.2B for infrastructure/regeneration
✓ Dormant Assets: £800M coming Q4 2025 (financial inclusion, youth, community wealth)
✓ Local authority grants frozen: indirect impact on small community grants
✓ Strategic pivot needed: align with youth/levelling up priorities where mission allows

Spring Budget 2025: What It Means for Grant Funding