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Charities are on the brink of collapse and will disappear entirely without help now

Charity shops on high street
Business rate relief will apply to charity shops, but not other premises like children’s centres Credit:  Steve Finn

Many people are having an indescribably hard time at the moment, both in the UK and around the world. If there is a silver lining to coronavirus, it is that it has reminded us of the profound human impulse to step up, to help our neighbours and our communities.  From our charities to mutual aid groups on WhatsApp to the new NHS volunteer army, the country is acting in its proud tradition: Britain’s little platoons, as Edmund Burke described them, have mustered.

Wherever you look, charities are stepping up – as they have always done – to help people and communities in this unprecedented crisis. Age UK is supporting people to be neighbourly volunteers, offering older people practical support safely. FoodCycle, which turns spare food into meals for vulnerable people, is running the same service as a takeaway wherever it can. Macmillan Cancer Support is working valiantly to keep its services going.

As a former charities minister and current chairman of a charity, I have to say to the Government as I look around the sector that things are teetering on the brink of collapse. While charities can’t close their doors like a business, and we shouldn’t want them to try, many are having to do so right now, today, and many more will have to do so soon.

The voluntary sector’s income is collapsing, with income streams dissolving so quickly it is frightening – private sector income has plunged, investments are plummeting, charity shops are closing and many fundraising methods are (wholly understandably) off-limits given the risk of spreading the virus. NCVO estimates that charities are set to lose out on a minimum of £4.3 billion of income in the next 12 weeks alone. 

This is very serious because of the size and scope of our charity sector. In the UK we’ve had the strongest charity sector anywhere in the world. It employed over 865,000 people and added £17.1 billion to our economy in 2016/17, while formal volunteering contributed an extra £23.9 billion. The social and economic impact of the sector failing will be substantial. Charities have been picking up the slack on so many social issues, from homelessness to social care to child poverty, for some time. My concern is that literally thousands of charities could be gone within a matter of weeks without action.  

The Government has announced an unprecedented level of support for large sectors of the economy and society during the crisis. But while that’s a welcome step, most of it doesn’t help charities. They can’t access the business interruption loans unless they get over half of their income from trading. Business rate relief will apply to charity shops, but not other premises like children’s centres. And the support for the wages of workers doesn’t help charities trying to keep going because it’s only for workers who aren’t working due to the crisis.

The Treasury is working flat-out and no one envies ministers the decisions they have to make, every one at pace and every one urgent – and the Chancellor has said that the Government is working on a package of support for charities. But I say to ministers, it can’t come soon enough: every day matters right now for the survival of Britain’s voluntary sector. Many are having to make decisions about redundancies and closures this week – faced with the hideous choice of being unable to help people now or being unable to carry on in the future.

In addition to any package the Government is working on to help, and I pray it is announced soon, there are other things it should consider doing to help – both in terms of business-as-usual and in doing things it should be doing anyway. Around £2 billion is still locked up in dormant assets: can we finally act to unlock it now at a time of crisis? Can the Government frontload the grants it’s already committed to making in the coming financial year, making them easy and quick to access? 

British people know there is a vital space between business and the state, filled by charities. But we must support it in its time of crisis, so it can support those most in need. We are in great danger of letting our social infrastructure wither on the vine. Charities have a vital part to play in tackling the coronavirus crisis, and in helping the country rebuild once the worst is over. But they can’t do that if they no longer exist.

The sector – and all of us – now need ministers to act fast before the collapse of so many charities becomes impossible to stop.