The government’s furlough scheme has the “perverse effect of incentivising mothballing of provision” when demand is increasing, a coalition of charity leaders have told the chancellor.
In a letter to Rishi Sunak, the chancellor of the exchequer, 31 leaders of charity representative bodies and funders (full list below) called for charities to be allowed to furlough staff and then bring them back as volunteers. The letter was coordinated by the Charity Finance Group.
On Saturday the government announced that the Coronavirus Job Retention Scheme would continue through November, ensuring that the government would pay 80% of staff wages relating to hours that employees don't work. Yesterday this was extended through to March.
However, charities have repeatedly warned that this scheme does not help all charities, particularly those which have seen their funding plummet while demand increases.
In the letter yesterday, charity leaders said the current scheme has “the perverse effect of incentivising mothballing of provision and not mobilisation”.
It adds that some charities have to decide between using the scheme and reducing their “activity when it is never more needed”, and risking “financial collapse in the near future so that beneficiaries are supported over the second lockdown”.
“We seek a simple time-limited extension, similar to the steps taken by the Department for Education in respect of adoption services to support practitioners' income while continuing their work with families, to enable those social change organisations who are facing financial distress to furlough staff and enable volunteering back to the cause to ensure maximum public benefit delivery can continue,” the letter says.
Government hints at more funding for charities
During Digital, Culture, Media and Sport Questions in parliament, a government spokesman hinted that there would be more financial support for charities.
Rachel Maskell, Labour shadow minister for civil society, had pressed the government on the prime minister’s commitment to do “much more” for the sector.
She said: “The sector provides vital support and services to people across our communities. It already has an accumulation of a £10bn deficit over just six months, because of the loss of fundraising, and 10% of organisations are due to fold, so can the minister say exactly how he and the prime minister are going to rescue our charities and address that deficit, and what further money will be forthcoming, as charities are never more needed and never more in need?”
Matt Warman, DCMS minister, responded: “Charities have performed an immensely valuable role, and they will continue to be more important than ever. I would point her to the £750m package, and she will know that the chancellor will be making a statement later on, which I am sure will not be the last one he will be making over the course of this pandemic.”
There was no mention of charity funding in the chancellor’s statement yesterday.
Full list of signatories to the letter to the chancellor
Caron Bradshaw, CEO, Charity Finance Group
Carol Mack, CEO, Association of Charitable Foundations
Vicky Browning, CEO, ACEVO
Neil Heslop, CEO, Charities Aid Foundation
Adeela Warley, CEO, CharityComms
Robin Osterley, CEO, Charity Retail Association
Ceri Edwards, Director of engagement, Chartered Institute of Fundraising
Kathy Evans, CEO, Children England
Anne Fox, CEO, Clinks
Amanda Tincknell, CEO, Cranfield Trust
Debra Allcock Tyler, CEO, Directory of Social Change
Kamran Mallick, CEO, Disability Rights UK
Rick Henderson, CEO, Homeless Link
Paul Roberts, CEO, LGBT+ Consortium
Paul Streets OBE, CEO, Lloyds Bank Foundation
Tony Armstrong, CEO, Locality
James Banks, CEO, London Funders
Dr Matt Plen, CEO, Masorti Judaism
Fadi Itani, CEO, Muslim Charities Forum
Jane Ide, CEO, National Association for Voluntary and Community Action
Charlotte Augst, CEO, National Voices
Georgina Carr, CEO, Neuro Alliance
Seamus McAleavey, CEO, Northern Ireland Council for Voluntary Action
Ed Mayo, CEO, Pilotlight
Janet Thorne, CEO, Reach Volunteering
Peter Holbrook, CEO, Social Enterprise UK
Rita Chadha, CEO, Small Charities Coalition
Donal Watkin, Association of Charitable Organisations
Kunle Olulode, CEO, Voice4Change
Rhidian Hughes, CEO, Voluntary Organisations Disability Group
Ruth Marks, CEO, Wales Council for Voluntary Action
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