The government is not doing enough to support charities affected by the coronavirus crisis, which will do “untold damage”, MPs warned today.
Over 70 charities submitted evidence to the the Digital, Culture, Media and Sport Committee inquiry into the impact of Covid-19 on the charity sector, which published its report today. The report criticises the government for being too slow to make funding available.
It said it was a mistake to treat charities like businesses, and raised concerns about the tone used by the government when faced with the scale of the challenge.
The committee is calling for extra funding in the form of a stabilisation fund and for a separate charity-specific job retention scheme.
Julian Knight, Conservative MP and chair of the DCMS Committee, said: “The strong message that charities gave us was not that they have some sort of right to survive but that people have a right to the services they provide.
“We warned the chancellor that charities told us they faced a £4bn gap in money coming in, with some smaller charities facing insolvency within weeks without immediate emergency support.
“The sum of money that's been made available goes nowhere near replacing the income that many charities have lost. We’re urging the government to set up a stabilisation fund to assist organisations to stay afloat so that we avoid increasing hardship among those who depend on charities to help them during this crisis and beyond."
Lack of transparency
MPs criticised the way the funding that has been made available is being distributed.
They said they were concerned it is being handed out too slowly and without enough transparency.
The report said: “An announcement of support is of limited benefit if charities facing imminent closure and workforce pressures are unclear whether they are eligible or how to apply.”
It added: “We are concerned that £360m is being allocated through conversations between departments, rather than clear engagement with the sector. The onus should not be on individual charities to make their needs known to departments, and there remains a lack of clarity at sector-level about how the government is determining which charities should receive support.”
The committee called on the National Lottery Community Fund and government to publish their eligibility criteria as soon as possible.
“It seems inevitable that this lack of transparency means deserving charities will miss out on much-needed support,” the report said.
“We urge the Department for Digital, Culture, Media and Sport and the National Lottery Community Fund to publish clear and comprehensive guidance about the criteria that will be used when allocating support, and how organisations can apply for it, without delay. Going forward, such guidance should be published to coincide with the announcement of public funding to minimise uncertainty within the sector.”
‘Charities are not the same as businesses’
The committee said charities needed tailored support, such as a separate furlough scheme that could allow charity staff to volunteer for the charity they work for.
It referred to the oral evidence from Oliver Dowden, culture secretary, who said: “We cannot save every single business, and that would include not being able to save every single charity”.
Today’s report said: “The committee is concerned at this answer from the secretary of state, given the scale of the loss the sector is warning of, or the impact it would have on those in society who rely on charities’ support.
“Moreover, charities are not the same as businesses, and thus to suggest that they should be treated the same ignores the fundamental principles upon which their work is based and the nature of their contribution to society.”
It added: “Many charities and voluntary organisations perform essential work that, while not directly tackling Covid-19, underpins the fabric of our society. Losing their services in either the short term or after the country emerges from this crisis will cause untold damage to individuals and communities. It cannot be allowed to happen.”
Government response: ‘It’s an unprecedented package’
A government spokesperson said: "We are providing at pace an unprecedented package of government support so that charities can help vulnerable people that need it most.
"On top of the £750m government funding which includes £200m to hospices and £76m to charities that support vulnerable children and those that have suffered domestic abuse, sexual abuse and modern slavery, charities can benefit from the coronavirus job retention scheme and the coronavirus business interruption loan scheme. We are working flat out to ensure help and support is directed as quickly as possible to the sector."
Charities urge government to act
Charities urged the government to listen to the committee’s recommendations.
Caron Bradshaw, chief executive of the Charity Finance Group, said: “I am delighted that the committee have expressly recognised that we cannot be expected to just fit in with solutions designed for business and that our calls for schemes to be amended have been echoed, including in relation to the Coronavirus Job Retention Scheme.
“The job is not done and it’s beyond doubt that charities and voluntary organisations of all sizes are Never More Needed and need more support. It’s encouraging that the committee have acknowledged that this has never been about saving charity jobs but rather preserving what we do for the people we serve, in the immediate crisis and through recovery.”
Peter Lewis, chief executive of the Chartered Institute of Fundraising, said: “The DCMS report makes a strong case for government to take further steps that we have been calling for to provide support for charities. Every day of this crisis the need for charity services increases, yet their financial position becomes more fragile.
“While we support the Committee's focus on smaller charities, it is not just smaller charities that are struggling to maintain services. An enhanced government package should include essential support to medium & large charities struggling to maintain services. We also believe there should be a specific focus on supporting BAME organisations who support BAME communities, and who have been disproportionately impacted by the crisis.”
Sir John Low, chief executive of the Charities Aid Foundation, said: “We proposed a whole package of measures which could be implemented to help charities in the short and longer term. We stand ready as always to work with Ministers to make this happen.
“MPs on the committee rightly welcome the government’s support for charities, but we need to think about ways in which Government, donors and charities can work together to ensure the sector remains strong. We need our charities now more than ever, and Britain cannot afford to lose this vital part of our national life.”
Aidan Warner, communications manager at NCVO, said: “This is a detailed, thoughtful and timely report. The weight of evidence from charities large and small is clearly compelling and the committee are reflecting the serious concerns of charities across the country to the government. There is much more to be done if we're to secure the future of many of the immensely valued organisations that have been hit by the effects of this crisis.”
Debra Allock Tyler, chief executive of the Directory of Social Change, criticised the government's response today.
She said: “This response is bollocks. How this government, despite the brilliantly insightful report and powerful recommendations from the DCMS committee, still fails to understand how much the country relies on the services charities provide to our citizens and the scale of the damage about to hit the public is literally gobsmacking.
“£750m is nothing compared to the £4.3bn we have lost for March, April and May. Come June – guess what – we start on the next phase of dramatically reduced income. Very few charities are able to take advantage of the support on offer for businesses. It’s an absolute nonsense to suppose the government is helping in any meaningful way. And the daftest thing is they’ll have to pick up the bill anyway when there are no longer charities around to support those who fall through the gaping holes created by this shortsightedness.”
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