Autumn Budget 2026: What does it mean for Hampshire's voluntary and community sector?
Following the government’s Autumn Budget Turath, our Head of Finance and Operations highlights some of the key announcements which may impact the sector.
We've focused on five areas that we believe deserve particular attention, together with some practical considerations which you may find useful and relevant to your voluntary, community or social enterprise.
1. Minimum wage increases
From April 2027, the National Living Wage and National Minimum Wage will increase by 3.9%.
The new hourly rates will be:
- Aged 21 and over: £13.21
- Aged 18–20: £11.27
- Aged 16–17 and eligible apprentices: £8.31
Employer National Insurance contributions remain at 15%, while eligible employers can continue to claim Employment Allowance of up to £10,500 annually. For many VCSE organisations, staffing represents one of their largest expenditures. While increases in minimum wages are welcome for employees, they also create additional financial considerations for organisations operating on fixed budgets or multi-year funding agreements.
What could VCSE organisations do?
Now is a good time to review workforce budgets for 2027–28, considering the full cost of employment rather than salaries alone. Organisations should also review existing funding agreements, particularly where staffing costs were calculated before these increases were announced.
2. Inflation & Project Budgets
The Office for Budget Responsibility now forecasts inflation of 3.4% in 2027, alongside economic growth of approximately 1%. Although these are forecasts rather than certainties, they underline the importance of preparing for continued financial pressures. For VCSE organisations, inflation affects much more than overheads. Rising travel costs, utilities, materials, venue hire and supplier charges can all affect the cost of delivering services. This is particularly challenging for projects funded over several years, where the original grant may no longer reflect the true cost of delivery.
What could VCSE organisations do?
Review existing project budgets, particularly multi-year programmes, to identify where rising costs may create funding gaps. When preparing future funding applications, ensure that budgets reflect realistic delivery costs, including appropriate allowances for inflation, staffing, administration and organisational overheads. It may also be helpful to develop alternative budget scenarios. Understanding what happens if costs increase further, funding is delayed or demand grows can help organisations make decisions before pressures become urgent.
3. Community Funding Opportunities
The Budget includes several commitments that may be relevant to organisations working with communities experiencing disadvantage. These include:
- £432 million across 2027–28 and 2028–29 to extend support for people sleeping rough in England
- An additional £1.5 billion for social and affordable housing, supporting the delivery of approximately 10,000 homes, with priority given to social rent
- A continued shift towards greater local and regional decision-making, with an emphasis on responding to local needs
Although these announcements do not automatically translate into direct grant opportunities, they may create opportunities for partnerships, commissioned services and community-led initiatives as programmes develop.
What could VCSE organisations do?
Keep informed about emerging local funding programmes and commissioning opportunities, particularly through local authorities and regional partnerships. Consider how existing projects contribute to the outcomes these investments are intended to achieve.
4. Cost of Living & Community Impact
The Budget also includes measures intended to ease financial pressures on households. These include:
- A £100 Household Energy Payment for eligible households in council tax bands A–D in England, with payments beginning in January 2027
- An extension of the temporary 0% VAT rate on qualifying domestic electricity supplies until the end of June 2027
- An additional £100 million for local authorities to provide discretionary support to households struggling with energy costs who are not eligible for the main payment
For organisations supporting people experiencing financial hardship, these measures may provide some welcome relief. However, eligibility, accessibility and awareness will be important. Not everyone who needs support will necessarily qualify for every measure, and some people may face difficulties understanding or accessing the assistance available.
What could VCSE organisations do?
Organisations providing advice, outreach or community support can play an important role in helping people understand what assistance is available and where to find reliable information. As local authorities publish further details, VCSE organisations can help communicate eligibility criteria and application processes, particularly to people who may be digitally excluded or less likely to engage with official communications. It may also be useful to monitor whether the measures affect demand for services such as food support, debt advice, community transport and wellbeing programmes.
5. Details about ringfencing money for prevention
At the 2027 Spending Review, the Government intends to introduce a new category of ringfenced spending known as Preventative Departmental Expenditure Limits (PDEL). The intention is to protect spending on programmes that deliver longer-term benefits and help prevent problems from escalating. The Government has not yet confirmed which specific programmes will fall within the new ringfenced category.
However, areas where preventative approaches could be particularly relevant include:
- Early intervention in mental and physical health
- Homelessness prevention and housing advice
- Poverty reduction, debt advice and financial resilience
- Support for children, young people and families
- Tackling loneliness and social isolation
- Community-based support that helps people remain independent
These are potential areas of relevance, rather than confirmed funding allocations.
What could VCSE organisations do?
This is an opportunity to strengthen the evidence of the preventative value that organisations already deliver. Alongside recording activities and the number of people supported, consider how projects contribute to longer-term outcomes. What difficulties have been avoided? What has improved in people's lives? What additional support might have been required without early intervention?
Looking ahead: Preparation, collaboration and opportunity
The Autumn Budget presents both challenges and opportunities for the VCSE sector. Rising employment and delivery costs will require careful financial planning, while changes to public investment and local decision-making may create new opportunities for collaboration. There are practical steps we can begin taking now: reviewing budgets, strengthening financial understanding, monitoring funding developments and demonstrating the impact of our work.
At Action Hampshire, we will continue exploring how we can strengthen our own financial planning, systems and processes, alongside opportunities to build colleagues' confidence in budgeting and financial management.
Would you like more support?
Become an Action Hampshire member and you'll have access to more useful resources, training and networking opportunities. Membership is currently fully subsidised so you won't need to pay a penny! This is part of our ongoing refresh of the membership model, designed to remove barriers, widen engagement, and ensure our offer meets the needs of the VCSE sector as pressures and priorities across Hampshire continue to evolve. The offer currently extends to statutory bodies (Affiliate Membership).