Coronavirus Financial sustainability Charity finance policy

What does the chancellor’s announcement mean for charities?

By Richard Sagar, Policy Manager at CFG

On 8 April chancellor Rishi Sunak made the long-overdue announcement that the charity sector would receive a £750m package of measures to support it through the significant interruption caused by the Coronavirus. CFG, alongside sector partners, has long been calling for additional support for the sector, in addition to the £330bn worth of schemes the chancellor has already announced for businesses.

Based on a rough estimate of the amount of money the sector would have expected to make over a 12-week period, combined with the reduction of income charities have seen (according to a joint survey we produced with PwC, NCVO, and the IoF), we determined that the sector would lose in the region of £4bn over three months due to the crisis.

It is in this context that the chancellor has pledged to spend £750m on a package to support charities, consisting of two primary means of support:

  • £360m from a number of government departments (which have yet to be listed) directed at frontline charities across the UK described by government as those ‘providing vital services and helping vulnerable people through the current crisis’. These will include hospices who are set to get £200m, St John’s Ambulance, victims’ charities, vulnerable childrens’ charities, and Citizens Advice.
  • £370m will take the form of grants to ‘small and medium-sized’ charities (yet to be defined) including through a grant to National Lottery Communities Fund for those in England. This will be directed at organisations ‘at the heart of local communities which are making a big difference during the outbreak, including those delivering food, essential medicines and providing financial advice.’
  • The final measure of support is a commitment from the Chancellor to match fund whatever funds donated at the BBC’s Big Night In charity appeal, or at least £20m to the National Emergencies Trust appeal.

While this additional money is welcome for the sector at a time when budgets are under immediate and significant pressure, we still believe that on its own, it won’t be sufficient to meet the needs of beneficiaries. This isn’t about saving charities or charity jobs but the beneficiaries that rely on the safety net that charities provide.

Alongside our direct concern that it just isn’t enough money to meet the need, there are still many unanswered questions regarding the specifics of these announcements. Perhaps most pertinent to charities struggling with cashflow will be when will this money be available? And what will be the selection criteria for those applying? From conversations with civil servants, these are still being drafted and agreed so it may be a little while before these are announced publicly. Another key question, is how much will charities be able to claim from either of these grants? Will it depend on their size? Or will there be a set amount for all those applying?

Whatever the answers to the questions, charities will need to know sooner rather than later, so this pledged money can help people most affected by the Coronavirus at a time when they need it most. CFG will continue to work with others across the sector to make the case for additional funding and to urge government to make changes to the existing schemes, including the Coronavirus Job Retention Scheme, the CBILS criteria and the Small Business Grants. This will allow more charities to make the best use of them in order to keep delivering public benefit for their beneficiaries. This is a first welcome step, but there is much more to do.

This post was last reviewed on 20 May 2020 at 15:47
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