8 Apr 2020

The government recognises civil society as one of society’s greatest strengths and announces a £750m funding package of support for charitable sector.

On 17 March 2020, the Chancellor Rishi Sunak announced a £330bn package to help businesses through the challenges arising from the COVID-19 pandemic.  However, given that many charities do not trade, they are unable to access much of the financial support available to businesses.

With income falling and the demand for services increasing, many charities cannot simply “furlough” their staff, and many have found themselves in a precarious position with some suggesting that they may become insolvent within a matter of weeks.

In the face of stark warnings that charities could face a financial shortfall of more than £4bn over the next three months, pressure has been mounting on the government to provide greater financial assistance to charities to help them deal with the impact of COVID-19.  The sector has come together impressively to push for this.

Today’s announcement by the Chancellor of a package of financial support specifically targeted at charities will, therefore, be met with some relief, although there are still likely to be some gaps.

What support is available to charities?

  • The Chancellor confirmed that all of the nearly 170,000 charities in England and Wales are eligible for the government’s Coronavirus Job Retention Scheme (ie ‘furloughing’ staff), as well as other forms of support (VAT deferrals, additional business rates relief).
  • For those charities which are on the “frontline”, £750m funding support will be made available from the government.
  • £370m of the funding will go to small and medium-sized charities working in communities to provide services such as “delivering food, essential medicines and providing financial advice”.
    • In England, this funding will be provided through organisations such as the National Lottery Community Fund, with a grant application scheme to be opened.
    • £60m will be allocated to charities in Scotland, Wales and Northern Ireland.
  • £360m of the funding will be directly allocated by the government to charities “providing key services and supporting vulnerable people”. The government has announced several examples of what will be covered:
    • hospices to help increase capacity and give stability to the sector (up to £200m)
    • St Johns Ambulance to support the NHS
    • victims charities, including domestic abuse, to help with potential increase in demand for charities providing these services
    • vulnerable children charities, so they can continue delivering services on behalf of local authorities
    • Citizens Advice to increase the number of staff providing advice during this difficult time
  • Timing-wise, the government says that its departments will now work to identify “priority recipients” with the aim for charities to receive money “in the coming weeks”.
  • The government will match all donations to the National Emergencies Trust as part of the BBC’s Big Night In fundraiser on 23 April, with a minimum pledge of £20m to the National Emergencies Trust Appeal.

This will be an important boost to many charities, but it is not the comprehensive package that many were calling for.  Importantly, there is no mention of social enterprises, who often provide the same or similar services – but it is possible that the detailed grant criteria will include them.  It is also clear that the government is taking a targeted approach focused on the impact of the COVID-19 outbreak, and is expecting many other charities to furlough staff and reduce or cease services.

For further details, the Chancellor’s speech has now been published here, and there is a HM Treasury press release with additional information.

In this fast-changing situation, keep up to date with our latest Coronavirus insights and advice, including useful resources for charities and social ventures.