Charities have reported facing difficulties finding operational space.
In response to a recently published survey, 73% of civil society organisations said they found it “moderately” or “extremely” difficult to look for physical spaces in which to provide their services.
Over half of the 203 charitable organisations, volunteer groups and social enterprises that responded said they were either “concerned” or “very concerned” about finding and securing space.
Meanwhile, the Ethical Property Foundation (EPF) said that charities can find it difficult to find the right space partly due to a lack of property knowledge.
‘Growth in insecure tenure arrangements’
Some 67% of respondents to the survey by Temporary Use Aid, which matches charities with vacant properties, said they were “concerned” or “very concerned” about finance or funding.
The next most concerning challenges were finding and securing space (50%), staffing, recruitment, volunteers and retention (45%), and reaching, supporting and engaging with a target audience (38%).
The survey also reported that nearly four in 10 charities needed locations to operate from for long periods, typically over three to five years.
EPF chief executive Antonia Swinson said that charities can find it difficult to find the right space “partly because they may not have the property knowledge to negotiate with commercial landlords and partly because they don’t always know what they need and what they can demand”.
“The issue with local authority landlords at the moment, is that the voluntary sector has traditionally occupied older, less energy-efficient buildings which many cash-strapped councils are now keen to offload,” she said.
“We’re therefore seeing growth in insecure tenure arrangements such as tenancies at will, which give minimal security for tenants and maximum flexibility for local authority landlords.
“Charities need to take professional advice, understand their worth and remember that everything is negotiable.”
Rates relief changes
Temporary Use Aid said charities might struggle to secure operational space partly due to business rates avoidance practices by some property landlords.
“With some property owners today finding it difficult to rent out their properties, due to their liability to pay business rates, they may choose to avoid paying business rates by ‘box shifting’,” it said.
“This is a practice where commercial properties are left unoccupied for a certain period of time to claim empty rates relief, before ‘reoccupying’ it with boxes or other furniture, triggering a reset on empty rates relief and allowing them to restart the cycle.
“This isn’t only highly detrimental to charities, denying them access to commercial spaces otherwise left empty, but the loss of rates revenue to councils has led to service cuts, pushing many closer to bankruptcy.”
Empty property relief (EPR) exempts certain properties that are empty and unused from business rates for up to three months, or six months for industrial properties.
Until recently, these properties could only benefit from a further period of EPR if they were occupied for a minimum six-week “reset period” before becoming vacant again.
But following a consultation last year, the government extended the reset period from six weeks to three months from 1 April 2024 in England to “reduce the financial incentive to avoid business rates on empty properties through ‘box shifting’”.
Temporary Use Aid founder Shaylesh Patel said: “Landlords should be partnering with charities to get charitable rates relief, while charities are able to secure a space to operate from.
“It’s a win-win for both charities and landlords, while helping local communities access important services and advice.
“Although the expected reduction in planning bureaucracy will help accelerate the conversion of empty commercial spaces into much-needed housing, this may further add to the affordable space pressure faced by the charity sector. Time will tell.
“However, it’s important to remember that no sector is exempt from exploitation, and there is potential for landlords and multi-chain operators to exploit the presence of charities to dodge taxes.
“This is why we’re calling for a limit on claiming charity empty rates relief for more than four weeks following being let.”
Swinson said: “When charities occupy commercial space they get a minimum of 80% rate relief, if not 100% if the extra 20% is given.
“This can be good news for commercial landlords and makes charities attractive tenants.”
Related articles
