(4 years, 6 months ago)
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Lord Addington
That the Virtual Proceedings do consider the fundraising and organisational challenges faced by the charitable and voluntary sector during the COVID-19 pandemic.
Lord Addington (LD)
My Lords, it is a great honour to lead a debate that has been so oversubscribed. I say a tremendous thank you to everybody who put their name down, and an even bigger one to all those who tried and failed. It is a pity that we could not find slightly longer for this, but I trust that the Whips’ Office, et cetera, will be able to make sure that we have a chance to discuss other aspects of this subject in the near future.
What inspired me to think about this is the fact that the charitable sector is an incredibly important part of our society. It supports virtually all aspects of things that we do and is a very big unit unto itself. If the Library’s briefing is to be believed, and it normally is, 870,000 people work in the field. It had an income in 2017 of something like £17 billion-plus and is approaching 1% of gross domestic product. That is a big area of activity. Virtually all aspects of life have a charitable input into them. Education, care, support, social activity, the arts and sport are all covered and interact with it in certain ways, as do virtually all commercial activities. This is something we must take seriously and pay attention to, not only during the crisis but as we exit it. Everything I will say here is based on the assumption that this will end at some point.
Today has been what I describe as a blue day for news—we have had good news that possibly a treatment is out there. The red days are when we hear about things that are not going so well; but we are on a blue day today, so let us be hopeful that this situation will end. Until it does, we must bear in mind that there is a huge amount of pressure on this important sector. It has been estimated in the Library briefing—to which slight changes have been made—that in 12 weeks of lockdown it is possible that the voluntary and charitable sector will lose £4 billion. The Government have put in £750 million, which is welcome—and I appreciate that other government measures have also been taken to help—but at the Library’s estimate, this covers only 18.7% of the loss.
We must look at how charitable organisations can survive to meet the needs that will still be there at the end of this period. One reason why I thought this an appropriate subject of debate for the House of Lords is that I do not think there is another group in the country that has as much interaction with, or knowledge of, charities. I do not know how many times we talk about people from the sector who brief us. I draw the attention of the House to my declared interests as president of the British Dyslexia Association and as a trustee of the Atlas Foundation—very different charities covering very different sectors—and I am involved with others as well. All were formed to act on issues that existed before the pandemic and the lockdown occurred. I hope that charities will be there to take on these issues afterwards, but unless we can find ways of supporting them through this they will not be. Without them, we will find ourselves with huge holes in sectors that make life effective and tolerable.
I will give some examples from areas that I know about. The minute that the schools were shut down, the British Dyslexia Association found itself with a huge number of people asking, “How do I support my child at home?” It has had to host online seminars, with huge numbers of people taking part and huge demand for more to come in. This is occurring at a time when the organisation’s income is falling. We could go through many different examples of how and why this kind of thing is occurring. But it is fundamental to charitable activity that you get people together— for example, at a dinner or a sponsored run or walk— and they get other people to give them money. You undertake the thing as a mass group and you hand over the money—great. You also stimulate people to set up standing orders and so on at that time. You make sure they are aware of the projects. You build up publicity to ensure that charitable foundations and suchlike, which are often formed by businesses, pump in a certain amount of money, and that donations will come in from wills drawn up for the end of life when houses are sold and so on. All these activities are either banned by the lockdown or have become much less profitable.
Many charities that have their portfolios invested in the general economy suddenly discover that their investments are reducing in value or dividends are not being paid out. This is doubly true for the charitable foundations. All the money going into these groups to support their work is disappearing or being reduced. This means that we will have a shortfall. Many charities work on the assumption that the money they are raising today will be spent in a certain amount of time. They will have to go to reserves. The whole sector is under enormous pressure—and added to the financial pressures are the individual and unforeseen demands of the crisis. This is all coming together, making it impossible for us to see where we are supposed to go. The longer the lockdown goes on, the worse this situation will get. Charities cannot really plan for their own future; this is beyond their capacity. We must look to the Government to help.
What is in it for government? If people are successfully educated—to go back to the dyslexia charity which I have talked to your Lordships’ House about often—you make sure that people are identified and supported through their education. In the long term, success in education is probably the biggest determinant of success in life: you will be reasonably successful, and you will be able to pay your bills and go forward. If things break down here, you are making sure that oncosts and pressures will affect you later. That is just one example.
Britain’s status overseas is raised by the actions of our charities to help nations that have a less well developed economy than us or have other problems. These charities are under particular pressure. Other charitable operations are taking place now that would not normally be, and the economy is shrinking, so there is going to be a problem, and a point at which we will have to say who gets the money. For the general public, it will probably be the problem in front of them at the time, not something in the future. All charities will be pressurised; they will find themselves curtailed and squeezed at virtually every level. We have to think of better ways of helping and supporting them, to make sure that the functions they have taken on are still there later.
I have some more examples. I have dealt with many autism charities: for instance, I have recently been talking to Autism Hampshire, a small charity that offers supported living and runs a series of care homes for people with autism. If it is not getting a reserve of money in, can it run these homes in future? Will that group be able to function properly? We must always keep our eyes on what happens next; if we do not, getting through this will not bring about results that are beneficial to our society. We need something which means that we can go back to a decent level of civil existence. If we come out of lockdown through a series of staged activities, as seems to be happening in the rest of Europe, we must make sure that we interact with charities as they go through those stages.
Government help is available in various forms, but has the sector been informed about it? Are the Government saying, in sector-by-sector blocks: “Here is the information you need in an easily accessible form”? If they are not, much of it will be wasted.
I have seen this in the past when working with people: “Oh yes, the information’s there. Click once here, go through that site, click twice, then ask for the booklet, and then it comes back to you”. Most people will have given up by that point; in particular, if amateurs are running an organisation, they are not going to follow through to find out what is going on. I have spoken to theatre groups that are running large theatres as charities, with youth wings and professional performers—the whole panoply. If they are under pressure, they have to know where the help is, particularly if staff have been furloughed or lost. You have got to make it as simple as possible. In this situation, the Government have to make the help available as easily available as possible. I hope that when the Minister replies for the Government, she will be able to point out where this has been done, or where it is going to be made simpler still. If the sector does not know where the help is, it might as well not be there.
If this situation continues and there is continued pressure, everything will get a little bit worse and the intervention will have to be more aggressive. We have to make sure that everybody knows there is assistance, or the state will have to start to take over some of these activities. If the state has to do that, there will be greater pressure on budgets all round. Will the Government please make an undertaking that they will assist those groups which take on the work that they have otherwise done? To put it bluntly, if you want more vulnerable people in society, you make sure that they cannot go to a dance group for the over-60s in a local church hall or school. When we go through this process, are we going to make sure that everyone knows when the school will be available and what appropriate groups can go in and act? That is a fundamental part of what is going on.
Such levels of communication will be complicated, but they will be needed. At the moment, the message is “Stay at home”. When we want people to go out, to be active and engaged and do positive things for society and for themselves, we will have to know that that is the message.
As I bring my arguments to a close, I call upon the Government to make sure that information about the infrastructure to help is communicated and emphasised at every point, and made as simple as possible. Without that, we will not be able to access the good will which is undoubtedly there, in most of these sectors, to help us come out of this properly. The organisation and financial structures of charities now will dictate what they can do when this process ends. The Government must take this seriously and address it in future planning. If they do not, I am afraid that much of the good work may be spoiled, and our society will be much weaker and more vulnerable in the future. I thank noble Lords for listening.
Baroness Anelay of St Johns (Con)
My Lords, I welcome the significant measures that the Government have taken so far to reduce the impact of Covid-19 on the ability of charities and the voluntary sector to continue their valuable work.
I want to refer to the challenges faced by charities whose main work is carried out overseas, especially in countries that are eligible for overseas development assistance. Like others, they face huge financial losses incurred by the immediate loss of income from charity shops and fundraising events. Oxfam, for example, is asking that the Government meet urgently with charity retailers to discuss limitations to the Retail, Hospitality and Leisure Grant Fund and to find a solution that works for the high street while complying with EU competition rules.
The extra challenge is the uncertainty about the amount that charities might receive in project support funding from DfID. This month, the Office for Budget Responsibility estimated that the UK economy is expected to contract by 12.8% this year, thus shrinking the size of the 0.7% of gross national income allocated to ODA. Some in the media have expressed concern about continuing ODA when we face Covid-19 here. Surely it is right to help charities to continue their ODA-funded work, which supports, for example, the provision of vital basic health services.
It makes economic sense too. Abiy Ahmed, the Prime Minister of Ethiopia, said recently:
“Access to basic health services remains the exception rather than the norm … If Covid-19 is not beaten in Africa it will return to haunt us all.”
He is right.
Baroness Pitkeathley (Lab)
My Lords, I do not need to tell any Member of your Lordships’ House that charities are the eyes, ears and conscience of society: they mobilise, they provide, they inspire, they advocate and they unite. I have worked in or with the sector for most of my long working life, and I chaired the House of Lords Select Committee on Charities. I thank the noble Lord, Lord Addington, for bringing about this debate and congratulate him on its extremely significant timing.
When my Select Committee reported in 2018, it was recognised that we were living in a time of profound change and that the environment in which charities were working was altering dramatically. How much more is that the case now? We should never forget that charities are not, and should not be, in existence to preserve themselves. Their only reason for existence is to serve the individuals and communities that they were created to serve. Those communities, such as the poor, the sick and the disadvantaged, are more in need than they have ever been—perhaps since the beginning of the welfare state—as a result of Covid-19.
The £750 million pledged by the Government is very welcome but it is nowhere near enough to reflect the money that charities have lost. For years, charities have been urged to diversify their income streams and to find new ways of financing their work, but now those very ways—their shops, their social enterprises and their partnerships with businesses—are all under threat.
What changes will the Government make to existing support measures for businesses, to make them more suitable for charities? Will the Government understand the urgent need for immediate support for charities, which are already running through whatever reserves they have and may well close entirely? Indeed, many would have done so already if it were not for the committed staff and volunteers on whom the sector depends.
Also, thinking beyond today, will the Government commit, through DCMS and the Treasury, to continue to work closely with charities and their representatives to ensure that this sector, which I do not—[Connection lost.]
The Deputy Speaker (Lord Faulkner of Worcester) (Lab)
I call the noble Lord, Lord Sharkey.
Lord Sharkey (LD)
My Lords, I declare my interests as chair of the Association of Medical Research Charities and of the Specialised Healthcare Alliance, a coalition of over 100 charities representing patients with rare diseases. I will make two points.
The first is about charity-funded medical research. Medical research in the UK depends very significantly on charity funding. Last year, AMRC members contributed £1.9 billion, about half of all public funding. However, Covid-19 has reduced charities’ incomes very significantly, and this is turning into a large reduction in research spending, probably at least £250 million for 2020-21. Already, more than half of AMRC’s members have stopped, paused or delayed the majority of their clinical trials and studies, affecting around 126,000 patients who should be taking part but now cannot. Medical research charities may not benefit from the charity support package announced by the Chancellor because they do not provide commissioned frontline services. These charities urgently require emergency bridge funding so that they can maintain their contribution not only to the Covid-19 frontline, but also to the many other critical ongoing and planned research projects, in which this country often leads the world.
My second point concerns rare disease charities, which provide vital and often unique support to the more than 3 million people in the UK who will suffer from rare diseases during their lives. These charities are often small, and they have seen income fall as the pandemic continues. They need urgent help but are concerned that they will not qualify under the guidelines announced for the charity support package. The Government are finalising the details of support packages for charities; I urge them to take into account the needs of medical research charities, the small, rare-disease charities and the millions who depend on them, when deciding who gets what support.
Baroness Finlay of Llandaff (CB)
My Lords, I declare my interests as vice-president of Hospice UK and Marie Curie.
Across the UK, hospices must raise £1.5 billion every year to provide essential expert and compassionate care. Over £1 billion comes from the public, through charity shops and fundraising. As the pandemic unfolded, Hospice UK estimated that a plummeting income to hospices of £70 million every month risked failing hospice services, which would throw enormous pressure on the NHS.
I thank the Chancellor for his swift action, announcing on 8 April an unprecedented £200 million package of support for hospices in England, with consequential funding in Scotland, Wales and Northern Ireland, as part of the Government’s immediate support to charities. This ensured that hospices remain an integral part of care services, as this pandemic has become a palliative care emergency. Hospices share innovations weekly through ECHO Zoom webinars that stimulate creativity and problem solving; contribute to major workstreams caring for those dying, whether of Covid-19 or non-Covid-19 causes; develop sensitive care planning that is respectful of human rights and individual needs; and integrate with bereavement services, particularly recognising the needs of bereaved children.
Looking ahead, charities must adapt, as the noble Lord, Lord Addington, said in his important opening remarks, with new models of charitable and statutory services working more closely together than ever before. The change is seismic. Hospice and palliative care commitment to supporting people when in extremis remains stronger than ever.
The Lord Bishop of St Albans
My Lords, at the very time when we need every charity in the country to be mobilised and deployed, many are teetering on a cliff edge. I have been very struck by the range of charities that have sent me briefing notes: St John Ambulance, Barnardo’s, the MS Society, the Motor Neurone Disease Association, Macmillan Cancer Support, the Scouts, Refugee, Cancer Research UK and the Rainbow Trust, to name but a few. I am sure that other Lords have heard from many others.
Over the years, as the Government have, rightly, raised standards in safeguarding, health and safety, and training, charities have had to employ people to meet those requirements. Now, as income from fundraising activities and charity shops, as well as rental income, has dried up, they are furloughing the very staff who are needed to oversee volunteers.
Of course, many charities are themselves major employers and, as such, are part of the drivers of economic recovery. To give a small example from my own neck of the woods, our Anglican cathedrals employ over 3,000 people—some full time, some part time. As well as providing places of worship and support, they are also art venues and a major contributor to the tourist industry.
We are all passionate about trying to allow charities to function fully again and to raise their funds; meanwhile, they need help, and they need it rapidly. Has the Treasury considered a simple mechanism based on raising the amount of gift aid that charities can claim back? It is an excellent form of match-funding and would be relatively simple to administer. I hope that the Treasury will work sympathetically with all the ideas that we can come up with.
Lord Randall of Uxbridge (Con)
I congratulate the noble Lord, Lord Addington, on obtaining this important debate. I draw the House’s attention to my entry in the Register of Members’ Interests in relation to my role as a trustee for various charities.
We have already heard, and will hear a lot more, about the very real hardships experienced by the whole range of charities. However, in the short time allotted for my contribution, I want to highlight the plight of one charity—perhaps one that does not immediately come to mind. I refer to the Zoological Society of London.
ZSL encompasses two zoos, science teaching and research, as well as being a national and global conservation NGO. Its turnover is too high for the coronavirus loan scheme or for the one aimed at large companies—the corporate financing facility. ZSL must keep its animals cared for, which means that zookeepers, site staff and animal health teams keep working. Therefore, the vast majority of the staff are ineligible for the furlough scheme, which requires staff to do no work at all.
ZSL is a national institution doing outstanding work on managing zoonotic disease such as Covid-19, as well as tackling serious conservation issues such as the illegal wildlife trade, which likely caused Covid to spread to people. All that is underpinned by ZSL’s zoo income, which currently is zero.
There is a real fear that ZSL will not survive if laden with debt. When the zoos are running with a full complement of visitors, the surplus enables the conservation and science to happen. Sadly, grants and philanthropy do not cover the costs of conservation and science. In the current environment, the zoos are shut, producing no income. They run at a loss during the winter and generate most surplus during the Easter break, and it is unclear when they will reopen. Given that 40% of visitors to London Zoo are foreign, it is extremely uncertain what levels of income ZSL will return to, even following reopening.
Unlike the Royal Botanic Gardens at Kew and the Natural History Museum, ZSL is a global impact science and conservation organisation, running its public-facing zoo with no core government support. I urge the Government to give careful thought to what support they can give to preserve this national institution.
Lord Mendelsohn (Lab)
My Lords, I express my deep gratitude to the noble Lord, Lord Addington, for securing this important debate and I associate myself with his excellent speech. I have a few questions for the Minister arising from my experience of working with charities at this time, and I declare a registered interest in or personal connection to all of them.
The government strategy, rightly, looks at how we should shield those who are most vulnerable from the most adverse consequences of contracting Covid-19. This will be relevant for many, where the future is unknown and the risks become greater the more the restrictions are loosened. Of the cancer patients in this category, fully 60% are blood cancer patients. Blood Cancer UK, which is dependent on public donations and events, is inundated. Specialised help and extended services need to be provided.
Will the Government consider providing direct support to charity and voluntary sector organisations which are supporting, and will continue to have to support, cancer patients with compromised immune systems over this longer period? Listening to the experts on treatments, it is clear that we are less successful in this country at treating vulnerable people’s underlying conditions than are other countries, as we have very high levels of entry to hospital care. Will the Government take steps to improve survivability to the level achieved in other countries and engage with the expert charities in doing so?
Norwood, the Jewish community’s largest adult and childcare services charity, has been deeply affected by both cost and revenue losses. The net effect is £1 million a month and we are eligible to apply for only a £5,000 grant. We do not expect this financial problem to be solved by the Government, but the greatest challenges have been testing and PPE. Government delivery has worked only when local authorities have been properly involved and properly resourced to do so. Will the Minister ask the Government to consider a greater deployment of delivery capability to local authorities and better support?
Many charities have had to furlough staff, but many staff members now wish to volunteer for charities. Naturally, we wish to avoid abuse of such a regime, but will the Minister work with charities such as First Tech Challenge UK, which has been looking at ways to create flexibility?
Finally, I ask the Minister to look at how we underpin families and communities. Organisations such as the Unitas Youth Zone in Barnet have been looking at how to repurpose youth provision not just to maximise what we can do for young people but to support the community and work with those who need food or help with education, or those with difficult family circumstances. Again, I ask the Government to consider convening local authorities to play a crucial role in what might come once the current situation has been loosened.
Lord Hastings of Scarisbrick (CB)
My Lords, I thank the noble Lord, Lord Addington, for allowing us to engage in this important conversation together to seek answers. I declare my known interest as chancellor of Regent’s University London, which is a UK registered charity.
In the next academic year, all UK universities expect a major reduction in fee income from international students, both EU and non-EU. For Regent’s University in particular, as a registered charity, where 80% of our student population is international and comes from 140 different countries, this will obviously have a massive impact on our finances. It is a major blow to our positioning as an educational flag-carrier for Britain’s place in the world.
For the sector as a whole, even a 50% fall in international fee income, combined with the degree of deferral for home students, will result in the loss of over £3.1 billion of income in the next year. Some UK universities, as the Office for Students will know, have high levels of external borrowing and low levels of cash reserves. Regent’s is fairly typical in having about five to six months of liquidity. We know that all universities will be affected by the drop-off of international students, but those universities that have charitable status do not have the opportunity to act as commercial or public universities may do, with the same breadth. I have written to Ministers in the Department for Education on these matters and have not had the courtesy of a reply. Could the Minister inquire of Ministers in the department whether they might respond?
Universities may be able to take account of some of the Government’s coronavirus job retention schemes. However, the money that may be required to hold universities together, particularly international support universities, will be substantial and some kind of support programme for the next six months will be essential to preserve our vital university education sector.
Baroness Morgan of Cotes (Con)
My Lords, it is a pleasure to take part in this important debate. I know from my time in the Department for Digital, Culture, Media and Sport how important civil society is and how hard the Minister and her colleagues will have worked with Treasury Ministers to put together the support package for charities already announced, which is very welcome, and the other schemes referred to.
In the time available I want to raise three brief but, I hope, important points. First, we have received a lot of lobbying and briefing from the larger charities ahead of this debate. However, I think we all know that it is the tiny charities that make a real difference at the grass roots in this country, for which not a huge amount of money makes a tremendous difference. I draw attention to my registered interest as a director of the Loughborough Wellbeing Café Project, which supports people with mental health problems in this corner of the east Midlands in Leicestershire. It does an awful lot online at the moment because physical meetings are obviously no longer possible.
Secondly, as has been hinted at, there must be a way of making any application process for small charities, and for charities in general, as simple as possible. I draw the attention of the Minister and her officials to a letter that those of us speaking in this debate have received from Lloyds Bank Foundation, which asks a series of questions about access to the National Lottery Community Fund—about definitions and how it will work—and I hope that the Minister might provide some more answers and details on those questions to help charities access that important funding.
Finally, as we are worrying about a second wave with regard to health risks, we also know that there will be second-order economic consequences, including for charities. I therefore add my support for the points made by the noble Lord, Lord Sharkey, about the medical research charities. The package put in place at the moment is clearly designed to provide immediate crisis funding for our charities, but there are longer-term consequences, particularly for other, non-Covid-related conditions, where funding for medical research is critical. I hope the Government will provide funding to enable those important schemes to restart.
Baroness Wilcox of Newport (Lab)
My Lords, on 27 March the Welsh Government announced an initial fund of £24 million to support Wales’s voluntary sector in response to the pandemic. The fund will support three distinct areas of activity: helping charities and third sector organisations financially through the crisis by providing direct financial support; helping more people volunteer; and helping volunteering services by supporting third sector organisations as well as strengthening essential third sector infrastructure, including the Volunteering Wales platform.
The primary issue for charities, however, is survival. After 10 years of austerity, they had already been cut to the very bone before this situation hit. Sickness levels of staff in charities have gone up, while organisations have seen an increased need for services, and calls for mediation and safeguarding are rising exponentially. Charities are also having to spend vast sums on PPE and sanitation products.
The charity Llamau works with young homeless people in Wales, and its chief executive, Frances Beecher, recently told me that her staff, who are working with vulnerable and already traumatised young homeless people struggling with lockdown, need all the expertise, resources and help to support them. The other big issue she raised was the lack of fundraising opportunities to bridge the gap between the income that charities receive and the cost of delivering services. It has been decimated: Llamau will lose over £600,000 this year.
Charities started as people were falling through the net of statutory support. The safety nets are now mainly with charities; it is where the knowledge and expertise are left. Many charities, especially regional and service delivery ones, will go to the wall. The fight to end youth homelessness or to combat domestic abuse will be stalled; the human cost will be huge. However, the financial costs will also be huge for statutory services, the criminal justice system and, indeed, mental health services. More support must be leveraged into the charity sector to prevent it being decimated. The Welsh Government have implemented measures, but they too need more funding. Can the Minister ensure that the UK Government also support charities and the voluntary sector with extra funding during these extraordinary times in which we live?
Baroness Benjamin (LD)
My Lords, at times of national emergency, the most valuable suffer most. The charities that support them are needed more than ever today, especially when public services cannot. It is therefore deeply concerning that charities are facing a serious threat to their survival. Lockdown is driving families to crisis point, and it is becoming clear that vulnerable children are the hidden victims of the pandemic. Children’s mental health is becoming critical, with anxiety and suicidal thoughts growing. Many children without computers cannot communicate with a project worker or anyone outside the home.
We know that people of colour are more likely to become critically ill or die with the virus, meaning that there are more BME young carers—children looking after sick loved ones or being bereaved. Children’s safety is increasingly at risk at home, outside the home and online. The Internet Watch Foundation has reported an increase of online child sexual abuse yet has fewer on-site staff to take down images. Vulnerable children are not attending school and are cut off from the support systems they rely on. Charities such as Barnardo’s—I declare an interest as vice-president—are working hard to continue to support children most in need, delivering face-to-face services. Yet, despite performing this essential work, charities are facing grave financial difficulties.
What will happen to vulnerable people when the charities they rely on for support cease to exist or are forced to reduce their operations? Who will be there for them? Will the Government therefore commit to reviewing the £750 million package urgently and provide additional funds to help charities to adjust to the new challenges that they face; looking at the furlough scheme and allow staff to volunteer to work for their charities; and, finally, make sure that charity workers, who are unsung heroes, can access PPE? Like NHS workers and many others, charity workers are risking their own health to do the job that they believe in.
Lord Bilimoria (CB)
My Lords, the charity and voluntary sector, against the background of a decade of austerity, finds itself under particular strain during the Covid-19 epidemic, there is no question. It employs nearly a million people, and accounts for almost 1% of GDP, as the noble Lord, Lord Addington, said, yet there will be a shortfall of £4.3 billion. The Government are, thankfully, putting in £750 million, but does the Minister agree that much more support is needed? In short, those who had little before have even less now.
The sector has always been inspirational; just look at Captain Tom Moore, celebrating his 100th birthday today—happy birthday, Captain Tom—who has raised £30 million for the NHS. Charities need to deliver. There has been a shock of income to the donor bases. Organisations need a guaranteed stable floor of income for many years. The focus on large, often umbrella, charities offering commonly understood services means that funding is not finding its way to smaller, local and more bespoke charities. Unless their stability can be guaranteed, it is these crucial local charities, which are often the glue in their communities, that will close. The demand for services will increase post Covid-19.
I am chancellor of the University of Birmingham, and our research shows, broadly, that charities that depend on annual revenue have been more likely to pause grant-making, while those with existing large endowments are taking a longer view and preparing to ride out the storm. Universities have launched their appeals to accelerate their world-class research, which has been supported by alumni and other stakeholders; we at the University of Birmingham are launching our own appeal today. Can the Minister say whether charities will be able to access the Government’s CBILS loans?
Faiths United, which includes as a member the Zoroastrian Trust Funds of Europe, of which I am a patron, has said that faith communities lie at the heart of the charitable and voluntary sector, with almost 70% of the UK population affiliating to a particular religion. Some 27%—almost 50,000 charities—of all charities in the UK are faith-based. Maurice Ostro, chair of Faiths United, said:
“Covid-19 has affected every faith community in the UK. Each community has suffered through the loss of loved ones, people falling ill and those who are struggling through isolation, loss of income or in some other way … We are rallying round in unity to say, whatever our faith, we are one United Kingdom.”
Baroness Sater (Con)
My Lords, I declare my interest as patron of StreetGames. I am in awe of every volunteer who has helped to tackle this unprecedented Covid-19 challenge; we owe them our deepest gratitude for their kindness, selflessness and commitment.
The financial impact of this crisis on community and voluntary organisations will be significant. The voluntary sector is so burdened that the need for these organisations has never been greater. It is right to highlight the financial challenges, but we must also recognise the need to harness effectively all the good will and civic spirit that we have seen to support this sector, not only throughout this crisis but well into the future.
The volunteering has been extraordinary, from neighbours, faith groups, local community groups, national volunteering networks and, of course, the 750,000 NHS volunteer responders. The numbers coming forward to help are unparalleled. Clearly, managing, supporting and securing a long-term volunteer legacy presents various challenges, as we saw in the 2012 Olympics, where 240,000 signed up with 70,000 were used. We must ensure that those who have come forward in recent weeks find ways to continue to volunteer in the future. Do we have the capacity and linkages lined up to include them all? Yet it goes beyond just capacity and co-ordination issues; it goes to information, legal status, incentives and the protection of volunteers, among other things.
In Britain, we have an enormous range of organisational forms of volunteering, with tens of thousands of small, medium and large organisations across multiple sectors. With the sector facing immediate challenges, and sadly more to follow soon, perhaps now is the time, when we have so many people coming forward from outside the formal frameworks to help, for us to begin to re-evaluate our current structures and to look widely for inspiration. Perhaps a task force is needed to do so. I would be grateful if my noble friend the Minister would meet with me to discuss this further.
Lord Harris of Haringey (Lab)
My Lords, I begin by declaring my interest as chair of the Fundraising Regulator, the independent non-statutory body that regulates charitable fundraising. Our role is to promote best practice so as to protect donors by setting standards, by investigating public complaints and by enforcing the Code of Fundraising Practice. These are challenging times for charities. Some charities will fail, possibly including well-known household names. The Government assistance package addresses only part of the £4 billion shortfall highlighted by the NCVO. We do not know when the current health crisis will end, but the economic aftershock will be long-lasting, so the two-way squeeze, in which charities have less money but greater demand on their services, will continue. The problems are not going away anytime soon.
If we want charities to continue to play a pivotal role in society, the question for the Minister is whether the Government will provide further support for charities as the coronavirus crisis continues, including the many excellent suggestions made in this debate, and ensure no less favourable treatment than that under the Coronavirus Business Interruption Loan Scheme announced by the Chancellor?
Recent weeks have seen extraordinary fundraising efforts and generosity by the British public in response to the pandemic. Despite personal incomes being squeezed, I hope that will continue. To this end, the Fundraising Regulator, working with the Charity Commission and the Institute of Fundraising, has published new guidance designed to equip people with the tools they need for their own charitable appeals while adhering to the standards of the Code of Fundraising Practice. Similarly, the regulator is working with online platforms to increase transparency of fees and card charges so that people can be confident about how much of what they give goes to the charities concerned.
We have also been collaborating with other organisations, including National Trading Standards, which I also happen to chair, to alert people to those nauseating fraudsters and scammers who are trying to cash in on people’s generosity at this time of crisis. I hope the Minister will continue to support these efforts so that the public can continue to trust charities and their fundraising.
Baroness Watkins of Tavistock (CB)
My Lords, I thank the noble Lord, Lord Addington, for securing this debate, and other speakers who have raised issues I would normally have raised in relation to vulnerable children, mental health and the homeless, particularly the issues raised by the noble Baroness, Lady Anelay, concerning smaller overseas charities. Unless we continue to support these, we will not have global health security.
However, I want to discuss immediately the plight of small charities, including museums, using the Florence Nightingale Museum as an exemplar. I declare my interest as a trustee. The situation there at the moment is very financially unstable. The museum has four months of operating costs left—this is with the excellent furlough scheme in place. It costs £20,000 a month to operate while closed—maintaining security, conservation, basic engagement and business planning—and with only three and a half full-time equivalents out of our normal staff team of 13. At this time of year, given the Easter and May bank holidays, Nurses Week and, this year, the 200th anniversary of the birth of Florence Nightingale, the museum budgeted to take up to £3,000 per day. Instead, we closed on 17 March, which means no income. These are the months that pay for the quieter periods in winter.
The museum has been losing income since February when groups from overseas, notably China, Japan and Europe, began to cancel. We have also lost 20 school bookings, which reduces our ability to encourage people into the nursing profession at a young age. It is currently suggested that, post opening, museums and attractions will do well to attract 25% of 2019 figures. We will face the added stigma of being based in a hospital, and the added challenge of a central London venue, where very few people may wish to visit and which can be easily accessed only by public transport.
Social distancing measures of the type currently being employed by German museums post lockdown will not make museums sustainable without support: no group talks or performances; limited numbers. As a small charity we balance the budget each year, but we do not make considerable profits. It would be a sad reflection on our society if the only international nursing museum, the Florence Nightingale Museum, were forced to close at this point in its history. How do the Government plan to assist small museums over the next two years? Might this involve capital grants, perhaps to enable free access to certain museums as they gradually reopen?
Baroness Hodgson of Abinger (Con)
My Lords, I too thank the noble Lord, Lord Addington, for bringing this important debate. Following on from my noble friend Lady Anelay’s remarks, I will consider the effect the pandemic is having on organisations working in developing and conflict countries. In fragile states and refugee camps—where there are high concentrations of poorly housed people, a lack of water and sanitation and low healthcare provisions—it is anticipated that mortality rates will be very high.
In these countries, women and girls are disproportionately affected. Evidence shows that in these emergencies, gender-based violence is exacerbated. Although communities depend on women as food producers and care givers, they are excluded from decision-making that affects their lives. It is also important for women to be able to access birth control, maternal health support and child vaccination programmes that should continue alongside education.
Fallout from Covid-19 could force half a billion people into poverty unless dramatic action is taken. This will be a significant setback to reaching the 2030 SDGs. However, in spite of increased need for services, the economic situation drastically impacts both UK aid, with 0.7% being less in real terms, and—as we have already heard—the ability of NGOs to raise money, with voluntary giving predicted to be down by 48%, events cancelled and charity shops shut.
Present circumstances make it very hard for NGOs still active in these countries to deliver their programmes, yet it is vital that their work continues, as experience shows that UN agencies often cannot respond quickly enough. Can more be done to support these organisations? Have the Government considered repurposing existing DfID grants? What further plans are there to assess and support the strengthening of developing countries’ public health systems, ensuring that they are truly accessible to the very poor?
Some are calling this situation the worst humanitarian catastrophe since World War II. We need to help NGOs to provide emergency support to mitigate the effects in the world’s poorest countries, and we need to act now.
Baroness Healy of Primrose Hill (Lab)
My Lords, I too congratulate the noble Lord, Lord Addington, on securing this debate at such a critical time for charities. This week, we should have been celebrating the achievements of all those who participated in the London Marathon and raised much-needed money for charities, matching the £66 million in 2019. Sadly, this is postponed until autumn—but the charitable sector’s needs are not.
As noble Lords have said, the National Council for Voluntary Organisations believes charities will lose around £4 billion over three months as a result of the pandemic, as lockdown closes shops and cancels fundraisers. The Government’s package of £750 million is appreciated, of course, but goes nowhere near meeting the £4 billion loss. Charities maintain the social fabric of our country. Once torn, it will take years to mend. I welcome extra resources being given to charities dealing with domestic violence as calls to helplines—and, tragically, murders of women—double. Large charities have been able to utilise schemes to pay staff, but furlough means they can no longer volunteer or fundraise. The MS Society, along with many other charities, has called for this rule to be eased.
Noble Lords have raised many examples of the essential support that charities offer to the most vulnerable, so I will reluctantly resist repeating them. However, I will raise one—Allergy UK, a small but vital organisation that supports those with life-threatening allergies and anaphylaxis. Uniquely, it warns members of ingredients in foods that have been wrongly labelled and therefore could kill. Can the Minister examine how this charity might be helped to continue its work? Its clients suffer increased anxiety about medication and other support needs during this pandemic. Life is difficult in normal times, but even worse for them now.
Baroness Scott of Needham Market (LD)
We live in an age where we have an obsession with numbers—that is, analysing and counting—but we occasionally forget what really matters: the outcomes. As inspiring as it was to see 750,000 volunteers come forward for the NHS, the fact is that many of them have been given no tasks to perform. In the meantime, 1.5 million of our most vulnerable shielded citizens have not been receiving the support that they were promised.
Volunteers need to be organised as well as mobilised, and that requires structure. It makes no sense to create large new centralised systems when existing local provision is already there. It may look fragmented at the local level, but it is much more likely to be effective than any other way when properly organised. Local providers are much more likely to be trusted, to be aware of local needs and conditions and, crucially, to be able to draw on resources quickly when they are needed. For those needing specialist help, it is much more likely to be at hand in a local network.
In Suffolk, we formed the collaborative communities board, made up of a range of statutory providers and the VCSE sector—including Community Action Suffolk, of which I am a trustee. Town and parish councils are also represented; they are an important link into many communities, especially in rural areas. We have 1,500 community groups registered on our app. The Home But Not Alone helpline is taking around 1,300 calls a week and is organising help for people in need, including food packages, medicines, transport and befriending. A 24/7 mental health hotline was opened on 15 April. Providing accommodation solutions is a major strand of work for all these organisations, which are working together to provide accommodation and the support that people need.
I urge the Government not to neglect the local dimension in all this.
Lord Low of Dalston (CB)
My Lords, I declare my interest as a vice-president of RNIB.
I want to say a word about advice services, which are often the gateway to charitable help. Many free advice organisations are facing imminent collapse. The Advice Services Alliance, the umbrella body for advice services and of which I am a patron, says that many advice sector organisations are
“struggling to keep services going”
when faced with increased costs from remote working while anticipating unprecedented demand. Many advice services have provided face-to-face services and there is a paucity of good remote working facilities at the local level. Many agencies cannot afford them; in any case, many clients seek face-to-face advice because they are unable to access online services.
The backbone of the sector’s workforce consists of volunteer advisers, but many of them are themselves in high-risk groups, and staff capacity is rapidly falling due to self-isolation and remote working. An estimated 9 million people have been furloughed, 950,00 previously financially independent people are turning to benefits, and 12.8 million households have less than £1,500 in savings and cannot meet rent or mortgage payments or repay loans.
This is where people turn to the advice sector. In many cases, it carries out work that saves the Government and the taxpayer money by preventing problems escalating. We are already seeing the impact of lockdown on levels of domestic abuse. This will get worse as advice agencies struggle. Other needs for advice on things such as debt will soon reach unmanageable levels.
In 2013, I chaired the commission on the future of advice and legal support. It called on the Government to come up with a national advice strategy and provide £50 million a year to support the advice sector. I call on the Government to revisit this issue and provide this regular cash injection now to help those most in need. Enabling everybody who needs it to access advice must be a key part of the Government’s strategy for the country’s recovery. We cannot predict the virus but we know what the advice needs will be. I urge the Government to act now.
The Deputy Speaker
Before I call the next speaker, I should alert noble Lords to the fact that, just after 2 pm, the Chair will be taken by the noble Baroness, Lady Finlay of Llandaff. I call the noble Lord, Lord Kirkhope of Harrogate.
Lord Kirkhope of Harrogate (Con)
My Lords, I declare my interest as a former Mental Health Act commissioner. While acknowledging that this is an important debate, I know that priority will be given by some colleagues to those organisations that are most closely related to the effects of this terrible virus. However, I want to concentrate on the large number of smaller charities, often administered and implemented by comparatively few people and usually on a voluntary basis.
There are more than 185,000 charities in the UK with an expectation, as we have heard, of income amounting to something like £48 billion. The three categories of medical research, animal welfare and children and young people benefit by far more than other interests and causes, but they are often looked after by larger bodies, which are better able to endure through a crisis like this. The Government have responded to such concerns and the representations of the Charity Commission by easing regulations, giving financial advice and lessening administrative burdens. But inevitably, smaller and well-focused charities such as museums in Ripon may be forced to merge with larger or less personal organisations. This would have an adverse effect on the recruitment or retention of valued and experienced volunteers, who are often previous beneficiaries of charity and in the older age categories.
Many small charities will be forced to close. The strength of charities relies on their ability to relate, sometimes very locally, in their communities. In this world, bigger is not always better. Much of the money offered by the Chancellor to help is for a few, large virus-related charities; the small amount available to others is unlikely to be sufficient to avoid a deterioration in the sector. Many individuals may lose support. The National Lottery is also targeting charities concerned only with the effects of the virus.
Although I welcome the Government’s support for smaller and medium-sized charities generally, I ask that the distribution should, as far as possible, be fair and objective. Simply leaving large resources to be allocated from umbrella organisations, such as giving money to Mind for all mental health charities, might well lack the objectivity needed. To become registered as a charity, it is necessary to comply with some strict rules. I fear that some of the worthy but limited aims in our communities might get lost in the present circumstances.
Baroness McIntosh of Hudnall (Lab)
My Lords, I remind the House of my registered interests, including as deputy chair of the Royal Shakespeare Company; and that the noble Lord, Lord Addington, said in his excellent opening remarks that many arts organisations are also charities.
Companies such as the RSC, the Roundhouse in Camden and Chickenshed focus their education and outreach efforts on young people who are at economic and/or social disadvantage. The work that they do has been shown to have a significant impact on the attainment of these young people. This work has never been more important than now; it will be even more vital once lockdown is eased and we begin to see clearly the impact that isolation has had on mental health and well-being. The RSC, for example, reports from its youth advisory board and its partner schools that many children and young people are feeling profoundly disconnected, losing motivation and experiencing inconsistent levels of support. The companies I have mentioned, and others like them, are of course doing all they can to develop online programmes to sustain this support and contact. But they are doing so while struggling with enormous threats to their ability to survive, as it seems increasingly likely that theatres will be among the last types of business to be allowed to resume their core activities.
Will the Minister please assure the House that DCMS and the Department for Education will work together to ensure that the vital educational work of arts organisations, which can have such a profoundly positive impact on learning, communication skills, confidence, empathy, agency and resilience, is not lost or forgotten as we recover from this crisis? This generation of children and young people are already losing so much. We owe them special attention over the coming years and months.
Baroness Jolly (LD)
My Lords, I declare my interests as president of RoSPA and trustee of Orthopaedic Research UK. I shall also address the issues of small local charities and echo all that my noble friend Lady Scott of Needham Market said. Their risks and responses to the epidemic will be different due to their size, resources and organisational capacity. These small charities have been launching emergency appeals to generate cash, and locals have responded by baking, singing, crafting and everything in between to support causes that they are passionate about. Only time will tell whether these efforts will make sufficient sustainable difference to fill the void.
These charities are embracing innovation and technology. Charities have launched a huge number of pandemic appeals, mainly using digital platforms. While this thrust of organisations into the digital realm is positive and will have lasting effects, a third of staff and volunteers lack these digital skills. This means that they could end up being behind the curve due to a lack of innovation or funding. Fundraisers have an important role in helping to build a sense of community during lockdown, but their roles will get harder as the crisis deepens and the extent of the economic impact becomes clear.
Small charities are facing a number of specific threats. There are restrictions on the ability to fundraise as usual, so cash flow will need to be carefully monitored during the year. Many charities, including social care charities, face increasing demands for their services. Volunteers are dropping off because they tend to be older people who are currently self-isolating. Carrying out business as normal will be almost impossible.
Can the Minister confirm that someone within her department, working with local government, has their eye on the smaller charities, which are able to be more flexible and responsive than the bigger national ones yet do excellent work at a local level?
Baroness Morgan of Drefelin (CB)
My Lords, I declare my interests as chief executive of Breast Cancer Now, the research and care charity, and as chair of the National Cancer Research Institute. In these uncertain times, medical research charities have been deeply committed to the national effort against Covid-19 as funders and patient support organisations. Action has been taken across the sector to deliver additional support services and, of course, to second clinical researchers to the front line of the NHS. The contribution of medical research charities is at risk now and for the future if charities do not have the vital funding at this time of heightened demand.
The impact of Covid-19 has been far greater than many charities could have foreseen and the consequences are far-reaching, as we know. Many medical research charities are reliant on fundraising, which is extremely challenging now. Many have had to protect their income and reserves by furloughing a significant proportion of staff, including research staff. Yet, worryingly, medical research charities really do look unlikely to be able to benefit from the support packages announced by the Chancellor recently. In 2019, these charities collectively invested, as we heard, £1.9 billion in the UK R&D set-up. Uncertainty around fundraising in a challenging economic climate poses a real threat to sustainable funding in medical research, since charitable investment is, as we know, critical to the success of the UK’s life sciences sector.
Will the Minister consider new ways that the Government can work in partnership with medical research charities to mitigate the impact of Covid-19 on the research sector? Solutions will need to be tailored and focused on ensuring continuity of charity-funded research now, but also for the future—for cancer research, heart disease, long-term conditions and mental health. We need to kick-start the UK’s research ecosystem when we get through this. This will be of huge benefit to the economy. Of course, it is all about saving lives too.
Lord Turnberg (Lab)
My Lords, the Government’s award of £750 million to the charitable sector is of course a welcome response to what is becoming a dire situation for so many charitable activities—from care homes to research, and from museums to the performing arts—all of which are suffering as their sources of funds dry up. Of course, this grant is never enough. It never can be compared with the enormous gap in funding that charities face. But it is a step in the right direction. Much more immediately worrying is the difficulty in making the funds available and delivering them to where they are needed with the speed that is necessary. The need is being felt now, not in a month or so’s time.
I have a suggestion about how we might reduce the inevitable bureaucracy that government funding involves. It is to make use of the expertise available in the philanthropic sector, which is flexible and agile, so can respond rapidly to where the funds are needed most. I have several recent examples. The noble Lord, Lord Sainsbury of Turville, has funded the food bank to the tune of £1 million; the Wellcome Trust rapidly funded £40 million for vaccine research; and the Wolfson Foundation, of which I have the good fortune to be a trustee, gave out its biggest single month’s award of £7 million this month in response to bids from mental health charities, hospices, care homes, museums and the performing arts. The Government might find this capacity to respond rapidly in a focused manner valuable in distributing their funds to where they are needed most in a rapid and timely way. Will the Minister consider ways in which the Government can work closely with the philanthropic sector to get their funds out rapidly now?
There is one further point about the contribution that charities make to the country’s economy. Will the Minister ask the Treasury to provide an estimate of the financial benefits to the Exchequer that the charity sector brings?
Lord Wei (Con)
My Lords, I thank the noble Lord, Lord Addington, for tabling this debate and refer to my own entry in the register of interests. I echo the sentiments of other speakers in congratulating the Government on the great start in terms of support for charities that has been initiated. But, clearly, we live in extraordinary times and more measures are needed. Will my noble friend the Minister consider a number of proposals that could help, in the short, medium and long term, many charities to survive and get through this crisis?
First, is it possible in the coming period to relax some of the furlough rules so that more workers generally as well as in charities can start to work a number of days, perhaps on condition that they give up some of their time to help, volunteer and fundraise for their local charities?
Secondly, there is an opportunity for the Government to impose windfall taxes on certain industries and businesses that are clearly doing very well out of this crisis. Could some of that earned tax be distributed back to charities in the form of an emergency gift aid increase, perhaps time-limited, to encourage, on top of all the generosity we have seen so far, more of the public to give at this time of year, certainly before the winter?
Finally—and I have spoken in other debates about this—I see a real opportunity for the Competition and Markets Authority to be much more aggressive in tackling monopolistic behaviour. Could the fines that it imposes be given to charities, taking into account any good behaviour on the part of many businesses that we have seen during this pandemic to help the public? Charities need support and we need special measures. What measures are being taken to enable charities to survive and thrive in the future?
Lord Hunt of Kings Heath (Lab)
My Lords, like the noble Lord, Lord Addington, I have been inspired by the work of charities locally which have responded to the crisis magnificently. For example, St Mary’s Hospice in Birmingham has combined with two neighbouring hospices to offer joint 24/7 community nursing provision and access to their in-patient units. The Birmingham Centre for Arts Therapies is continuing to run sessions online with very vulnerable clients. Community Transport Birmingham has continued to provide transport for disabled people, particularly for patients who need dialysis. Care Home Volunteers Wiltshire is continuing its wonderful befrienders scheme, writing to care home residents, keeping in touch and trying to encourage them in difficult circumstances. Baby Lifeline has opened an online Covid-19 support system for pregnant women and new mothers, providing clear and accurate advice.
These charities are doing wonderful work, but, as many noble Lords have said, they face a double whammy: fundraising activities are declining and many grantees are reducing the funds they give, partly because of investment downturn; yet, at the same time, pressure on them to provide more services grows and grows.
I have three requests of the Minister. First, the £750 million made available by the Chancellor is welcome, but it is not enough. Secondly, can she ensure, particularly in respect of smaller charities, that the application process for funds does not bog them down in page after page of business plans and forms to be filled in? They are too busy on the front line. Please can it be made simple for them to apply for funds? Thirdly, to echo other noble Lords, can she make sure that the funds reach them quickly?
Lord Burnett (LD)
My Lords, I congratulate my noble friend Lord Addington on securing this debate and draw noble Lords’ attention to my entries in the register. I have the honour to be patron of Dartmoor Search and Rescue Tavistock and was fortunate last year to secure a debate on that charity. The Minister kindly came down to Tavistock to prepare for the debate. I can tell her and other noble Lords that, although the number of incidents is understandably down, it is business as usual for the team, some of whom are key workers. I am also a trustee of Charitable Giving, itself a charity, which administers payroll giving and other workplace giving services for donors as diverse as employees in certain departments of state, large public companies and private individuals. We process millions of pounds every month and it is vital for beneficiaries of many charities. Like many charities, we have a number of employees, and we had a virtual board meeting yesterday.
From that and my involvement in other charities and businesses, I emphasise the following to the Minister and the Government: first, the Government’s furlough scheme has been immensely helpful to small and medium-sized charities and businesses and their millions of employees. Secondly, charities and businesses need to know as soon as possible how and when lockdown is to be lifted, and in what stages. Thirdly, the Government must give as long notice as possible of any major changes in their support programmes. Fourthly, there must be co-ordination between ending the furlough scheme and the lifting of lockdown. Individuals should seamlessly and continuously pass from furlough back to employment. Fifthly and finally, our Armed Forces charities must never be forgotten. They must receive government support. We owe serving and retired members of our Armed Forces a debt of honour which we can never repay.
The Deputy Speaker (Baroness Finlay of Llandaff) (CB)
As the noble Lord, Lord Kerslake, is not responding, I call the noble Lord, Lord Leigh of Hurley.
Lord Leigh of Hurley (Con)
My Lords, I too congratulate the noble Lord, Lord Addington, on this important debate. As my register of interests discloses, I am a donor and trustee of a number of charities and I was asked by David Cameron to join a task force from which the Fundraising Regulator, chaired by the noble Lord, Lord Harris, was formed.
The charity sector statistics are staggering, as the very helpful NCVO report points out. The UK public donate £22 billion a year, across 167,000 voluntary associations. Other Peers have rightly drawn attention to the loss of income and the effect that this crisis will have on some very deserving causes. It might well be that the £4 billion that the NCVO predicts in lost income for the first three months stretches across the year, although personally I am not so sure. However, there will be a substantial drop in revenue. Of course, we would all love the Government to do more to help, in addition to the measures already announced, but if this crisis is costing us £40 billion per month, I cannot see that much more can or will be done, other than perhaps some soft loans.
It will be up to the third sector to take radical and difficult steps. These will include merging some charities where there is clear and significant overlap to reduce costs. The duplication in the sector, with each organisation having its own overheads, is not efficient, nor is the constant competition to raise funds against other charities. Not only do many charities have to think about merging now, but they also have to look hard at their costs. The mean average salary across the top 100 charities was £265,000 for the top CEOs. Of course, many have taken welcome pay cuts, but the lessons of the NCVO’s 2014 report still have not been learned.
No one would have wanted this terrible current situation. Sadly, we have no choice but to accept that the sector needs to be streamlined, more efficient and more focused on its main purpose of helping those in real need. I hope that my noble friend the Minister will agree to help with the streamlining. I really do wish the sector well over this terrible period.
Baroness Thornton (Lab)
My Lords, I declare an interest as patron of Social Enterprise UK and as a senior associate of Social Business International. I thank the noble Lord, Lord Addington, for the opportunity to take part in this important debate. I will raise a series of questions about social enterprises, mutuals and social businesses, because these are DCMS’s responsibility at the moment, as the Minister will know.
I am very concerned that this growing sector of our economy is falling between the provisions to support businesses and the provisions to support charities and the third sector. It is therefore in jeopardy. I briefly remind noble Lords that this sector is bigger than agriculture; it makes a £60 billion contribution to the UK economy and employs 2 million people. It is estimated that 50% of social enterprises are at risk of running out of cash by June. That could risk 1 million jobs.
If the Minister cannot address the questions that I am about to ask, I would be very happy for her to write to me. First, social enterprise business leaders have said that 1 million jobs are potentially at risk due to gaps in existing government support measures, and they have put forward a plan of action. Will the Government act on their recommendations and extend business grants and improve access to finance to save tens of thousands of social enterprises?
Secondly, can the Government explain why business grants have been provided to massage parlours, betting shops and casinos, but social enterprises employing vulnerable people or working in the most deprived communities are not getting access to these cash grants?
Thirdly, the Government have promised £330 billion in loan guarantees, but social enterprises, like other businesses, are struggling to access them. What are the Government going to do to develop tailored financial support for social enterprises within the social investment market?
Fourthly, social enterprises are reporting that they are not getting business grants due to eligibility restrictions, but some businesses that possibly have questionable value are being given grants. Can the Minister explain what criteria the Government are using to measure the social value of businesses when deciding which organisations get support?
Finally, social enterprises are delivering front-line public services on behalf of the state, but many are reporting not getting access to emergency funding for PPE, additional equipment and staffing costs. Will the Government ensure that social enterprises and charities delivering front-line public services can access the unlimited emergency funding that the state is providing to statutory bodies?
Lord Purvis of Tweed (LD)
My Lords, I too commend my noble friend Lord Addington on securing this debate and I similarly declare an interest as a trustee and patron of a number of charities, including a small charity supporting the families of children with complex and additional needs.
I am contributing from the rural Scottish Borders. Rural areas like this are beautiful, but they are often a burden for vulnerable people and the charities that support them due to their isolation and distance from specialist centres; for example, for some here it would be more than a four-hour round trip to a Covid-19 testing centre, with limited public transport. There are often connectivity problems, and many are low-income areas; fundraising for small rural charities is therefore more limited.
Government support through additional funds for the National Lottery Community Fund across the nations is welcome, although limited, as my noble friend Lord Addington mentioned. Its online portal makes clear that the fund has major capacity issues with processing. For the next six months, non-directly linked Covid-19 applications are likely to take three months to be processed. Ongoing economic and public service pressures will mean that small rural charities, more dependent on funds such as these, will be impacted disproportionately. There remain too many discrepancies between business support packages and support for small charities, and there are concerns that charities will still be asked to carry out burdensome applications for much in-demand local authority support, which often asks for match funding that will simply not be available.
Lastly, small charities rely heavily on self-employed people to support them and to work for them. They will have to wait at least three weeks from now before being contacted by HMRC to learn whether they can apply for support, and first payments are over a month away. Will the Government ensure that there is specific, directed support for small rural charities and fast-track support for self-employed people, especially for the mothers and other women who support charity activities? The needs of small rural charities in particular, with the extra barriers they face, will be great, well into the future. If the Government can address these points, charities’ ability to help the people most in need will be helped.
Baroness Cox (CB)
My Lords, I too warmly congratulate the noble Lord, Lord Addington, on this very timely debate. I declare an interest as founder and CEO of the Humanitarian Aid Relief Trust, working with partners abroad. I greatly appreciate the contributions, including that of the noble Baroness, Lady Anelay, which have highlighted the issues being faced there. Today, however, I shall focus on the problems in this country.
As your Lordships know, the Chancellor of the Exchequer has announced a fund totalling £750 million to assist the charity sector, including match funding for the “Big Night In” appeal, broadcast by the BBC last week. Although warmly welcomed, and a testimony to the generosity of the British people, that money falls far short of the funding needed.
A survey by the Directory of Social Change found that half the charities surveyed were already in financial difficulties due to the pandemic, with another 42% expecting to face difficulties. The UK charity sector has stated that it faces a shortfall in its total income of £4 billion due to the pandemic. Will the Minister tell us what the Government will do, beyond the £750 million package already announced, to ensure that critical services supplied by charities will survive the crisis? Also, which areas will be prioritised as the pandemic continues and what criteria will be used to select them? What processes are in place to ensure that this funding supports services for the most vulnerable, and that equalities considerations are fully woven into the design and delivery of the schemes?
I turn briefly to the £370 million to be distributed by the National Lottery Community Fund. What will be the definition of “small charity”? What will the eligibility criteria be? When might charities begin to bid for that much-needed funding?
The most important challenge for civil society is not the preservation of any individual charity itself but the vital support provided by charities for the communities that they serve—support not otherwise available. Therefore, the financial deficits will have serious effects for many of the most vulnerable people in our country today.
Lord Marland (Con)
I refer to my registered interests as the chair or trustee of various charities, ranging from the military to the arts and legacy. Noble Lords have made it abundantly clear that funding is drying up as people rightly concentrate on health sector charities, and because the income and asset base of donors has been reduced as a result of this pandemic. Government support is very welcome, but it is temporary, as it should be. We therefore need to ask the Government to establish a giant incentive scheme to establish greater tax breaks by increasing the gift aid threshold, by creating huge tax breaks for the corporates so that they can focus on giving generously to charities, and perhaps by encouraging an in-life credit for legacies so that charities can more clearly predict the cashflow coming from wills. However, they should also set a limit per charity so that these sums can be widely distributed to a broad range of causes. I ask my noble friend the Minister to respond to this verbally later or in writing.
Lord Liddle (Lab)
My Lords, I would like to focus my remarks on the international aid charities, and here I declare an interest, in that my wife Caroline Thomson is the chair of Oxfam. The crisis we are in is global and it is the poor around the world who will suffer most; international action is needed. However, UK charities are having to cut back on their programmes and on their staff, who would be able to assist. The Government’s £750 million package is welcome but as the noble Baroness, Lady Cox, said, it is not enough and it does very little for the international aid sector.
I would like to ask two questions that reinforce what the noble Baroness, Lady Anelay, said at the start of the debate. First, do the Government recognise that the role of charity shops is particularly important for charities? Oxfam receives a monthly income of £7 million from its charity shops. If they do recognise that, can they find a way of improving charities’ access to the Retail, Hospitality and Leisure Grant Fund, which is offering £25,000 per property? I find it bizarre that this aid is being restricted, apparently because of breaches of EU state aid rules. In this situation, that sounds like legal quibbling over common sense. Will the Government therefore urgently meet with charity retailers to find a solution?
My second question concerns support for international work. Can DfID play a bigger role by, for instance, providing stabilisation loans for some charities and by adjusting its programmes to help them cope with the immediate financial consequences of the Covid crisis? I recognise that the Minister may not have time to answer these questions today, in which case I would like her to write to me on them.
Lord German (LD)
My Lords, I refer to my interests as recorded in the register and declare that I am the chair and trustee of the Parliament Choir, which is both a parliamentary body and a charity providing support for young musicians. Charities come in all shapes and sizes—some big, some small—but the majority are numerically on the micro scale, with few paid staff and perhaps many volunteers. Here, I echo the words of my noble friends Lady Scott and Lady Jolly regarding the service they provide. The question is, when will these small charities be able to bid for funds from the National Lottery Community Fund? The consistent message we are hearing both in this debate and from charities is that as a result of the pandemic, the demand for charitable services is up while income is down. That is the conundrum the Government must tackle.
I have two asks of the Minister. Like other noble Lords, I have been contacted by many organisations and charities that have outlined the difficulties they are facing. Can the Minister guarantee that she will ensure that all these charities receive a response to the issues they have raised and that a copy of that response will be placed in the Library?
Many charities have handled their lack of fundraising income by furloughing staff. However, those people are often critical to providing the services that are so needed in these exceptional times. What consideration have the Government given to allowing furloughed staff to return, albeit for short periods, as volunteers in the charities they serve, instead of having to volunteer for another charity? Anyone who has been closely connected to a charity knows that myriad tasks have to be performed to enable them to function and be governed correctly—from organising leased vehicles to running appropriate checks and training volunteers. The latter is very important indeed, so these people are crucial. Where the absence of furloughed staff is affecting delivery of a needed service, surely it makes sense for them to be able, under strict conditions, to volunteer some of their furloughed time to assist.
More than anything else, as has been pointed out in the debate, this crisis has shown us that charities make our world a better place. We must ensure that we do not lose them because of this pandemic.
Baroness Uddin (Non-Afl)
My Lords, the national and international charity sector has been the safety net for those most in need. It has strengthened our communities with extraordinary, innovative solutions, providing housing, education, refuge and food banks, and creating a platform for emerging leaders, including prominent women. This crisis should not change our country; it should define our humanity. Like other noble Lords, I have worked with numerous national and international NGOs, for 40 years. It was a privilege to set up a number of organisations to work with vulnerable women and their families. All of us had a sincere determination to challenge the status quo and liberate lives from social inequality, poverty and discrimination.
A decade of austerity and punitive cuts has meant smaller NGOs closing or reducing their services, often preventing vulnerable families—particularly women experiencing or fleeing violence—from accessing a trusted anchor and a lifeline of hope. Many women-led organisations have suffered draconian cuts, including in my own borough, where services for minority women have been severed, having been seen as surplus to requirements. Sadly, we are witnessing the impact of policy decisions, with many women and children suffering abuse in silence, unable to access refuges or the support and counselling they urgently and desperately need. I hope that the Minister will agree to reassess the role of the voluntary sector in developing the kinder society that is much needed at this time.
Each year, Muslim charities raise over £100 million during the month of Ramadan, with women donating a significant amount. Several national organisations are experiencing dramatic reductions in donations, although they have mobilised volunteers to support vulnerable families, local food banks and NHS staff. I have witnessed first-hand these remarkable endeavours. Can the Government consider mandating local authorities to ring-fence their financial support, to ensure that women’s economic, education, employment and safety needs are at the core of all local authorities’ services post-lockdown?
Baroness Prashar (CB)
My Lords, Covid-19 has reminded us of the true worth of the voluntary and charitable sector. It has also shown how fragile and vulnerable its infrastructure is. The noble Lord, Lord Addington, described graphically the pressure that charities are under. The Government’s support and the Charity Commission’s flexible approach are very welcome, but the Government’s response is inadequate, given the scale of the problems faced by charities.
Once the pandemic has subsided, the role of the sector will become even more crucial in dealing with the aftermath and the new normal. Both national and international charities will be central to the efforts needed to respond to the consequences of this pandemic. The sector itself will have to adapt to the new normal, develop new ways of working and build its own capacity, capability and resilience. The Government’s support and leadership will be needed to help the sector beyond this crisis. Will the Government work with funders, regulators and philanthropists to provide that leadership? Will they actively create a climate in which giving can thrive? As we know, philanthropists can act as catalysts to mobilise networks and local communities.
While charitable giving cannot fill the £4 billion gap, it can help the sector to adapt and focus on the new approaches that will be required in the future. What future measures and approaches are the Government considering in order to maximise giving?
Baroness McIntosh of Pickering (Con)
My Lords, I declare my interests as set out in the register, in particular my work with the Encephalitis Society, the National Association of Child Contact Centres and the North Yorkshire Moors Railway. I congratulate the noble Lord, Lord Addington, on calling this debate at this time of acute isolation felt by many during Covid-19. I pay tribute to the many charities, in particular those in farming and medicine, at this time.
I recognise the collapse in the rural economy, particularly tourism, hospitality and heritage. Women are, as the noble Lord, Lord Purvis of Tweed, said, under pressure at this time. Many are working on farms, are self-employed or in partnership and trying to home-school as well as keep home. There has been a surge in demand for charities, yet there has been a collapse in income. I would like the Government to recognise the cash-flow problems, particularly in the longer term. Will the Minister, in summing up, recognise that there is a need for medium and long-term funding from the Government, particularly for smaller local charities working on the front line in their communities?
At the moment, small charities are falling through the net. They are not eligible for support from community foundations. Will my noble friend see fit to allow charities to access the small business grant? Will she agree that if social distancing measures are to remain in the longer term, the furlough scheme should match the period of social distancing? Will she also be mindful of the interplay between paid staff in charities and volunteers? Will the Government ensure that there will continue to be opportunities for future volunteers, particularly those of an older demographic, who are affected by social distancing? The consequences for small charities of a shorter furlough period but longer social distancing will be dire for the winter of 2020 to 2021.
Baroness Massey of Darwen (Lab)
My Lords, I am grateful to the noble Lord, Lord Addington, for securing this important debate. I pay tribute to the vast number of charity workers and volunteers. They are often the cement that holds society together.
The Government’s emergency support fund is, of course, hugely welcome, but it cannot resolve the long-term effects of Covid-19, which may go on for years. All the charities I have spoken to emphasise the need to be able to plan strategically and maintain their structures. This is often not built into funding, and funding is becoming scarcer while demand increases. Legacy and direct debit funding are going down, donations are hard to come by and large organisations fear damage from the impact of Covid-19 on the Stock Exchange.
I want to mention two local charities feeling the effects of Covid-19. I have two friends who work as volunteers in a food bank, Fitzjohn’s in Lewes. Volunteer numbers have had to be reduced due to social distancing, but there are constant requests for more help. They are managing vulnerable people, some with complex needs who may find it difficult to cope with applying for support. The main income is from local fundraising and the yearly council grant.
The other organisation, of which I am a patron, is the Maya Centre in north London. It is a small women’s counselling centre and 60% of its cases involve domestic violence. There are increasing requests for counselling from women who have been bereaved and are traumatised. New funding has to be found for online working. A big problem for the charity is that many funders, including the Big Lottery Fund, deal only with new applications, so the Maya Centre no longer qualifies. What will our society look like without local charities such as food banks and women’s centres? How much long-term damage might be done to vulnerable people and who will pick up the pieces, often at great cost? How will the Government assess local needs and respond?
Baroness Sheehan (LD)
My Lords, Bond, the umbrella group representing over 400 NGOs working in international development and the humanitarian sector, estimates that many members will not survive unless they receive urgent financial support to cover core organisational costs. These are valued organisations held in high esteem nationally and internationally, so I have four asks of the Government.
First, the £750 million charity support package, though welcome, does not include charities that work abroad, nor is it sufficient for those it does support. Will the Government increase support commensurate with the £4 billion loss that the sector faces and, of that support, will they make at least £320 million available to UK NGOs working abroad?
Secondly, can the Minister say whether the request to increase the £20 million allocation to the rapid response facility to at least £100 million, as per the letter to the Secretary of State for DfID from Wendy Chamberlain MP, to which I and over 100 other parliamentarians across both Houses are signatories, will be met? These front-line NGOs have a delivery capacity and reach into vulnerable communities second to none.
Thirdly, will the Government allow charities in current government programmes to pivot to tackle Covid-19?
Fourthly, when will charities have access to the furlough scheme and CSOs to small business funding?
Covid-19 does not respect borders. A single case of a superspreader can infect people around the world very quickly. We are all in this together, so unless the crisis is over everywhere, it will not be over anywhere.
The Deputy Speaker
Lord Loomba? As the noble Lord, Lord Loomba, has not responded, I call the noble Lord, Lord Astor of Hever.
The Deputy Speaker
Lord Loomba, please wait as the noble Lord, Lord Astor of Hever, has started, and we will come to you afterwards.
Lord Astor of Hever
My Lords, this pandemic has shone a bright spotlight on the critical work carried out by charity and volunteer groups in the UK—life-saving work, prompted by compassion, across many sectors. It has taken a tragedy of this magnitude to reveal the extent of the exposure of the most vulnerable in society to suffering, be it through physical or mental fragility, abuse at the hands of others, hunger, homelessness or extreme poverty.
Many good charities around the country face demise in a few months’ time, and those that manage to survive may look very different. This new and complex virus has hit the elderly particularly hard. Age UK is now entirely focused on providing essential pandemic-related support, such as advice lines dealing with financial worries, loneliness and accessing food and medicines. However, some of its 140 branches face closure without financial assistance.
One of the most pressing issues for the Government is how they prioritise funding. This is a difficult one, for so many areas are critical, from key medical research to the rehabilitation of young offenders, and from the care of the elderly to the protection of victims of domestic abuse. Neglect mental health and you leave swathes of society exposed. I therefore look forward to my noble friend the Minister saying something about the Government’s priorities on funding.
Covid-19 has shown how many charities are taking the pressure off the NHS. The army of volunteers and helpers is an invaluable adjunct to doctors and nurses and other care workers. Any reform and funding of the NHS will need to be undertaken in tandem with efforts to sustain the indispensable work of the charitable and volunteer sector.
Lord Loomba
I declare my interest as vice-president of Barnardo’s, the UK’s leading charity for children. It relies heavily on donations from the generous general public, with much of that coming through large gatherings and large and small fundraising events the length and breadth of the country, which are now prohibited. In addition, more than 700 of its retail outlets, producing around a third of the charity’s income, are shut for well over a month, and we have no idea when they will be functional again. On the other hand, it has reported an increase in overheads due to moving to remote working for staff and the provision of some front-line services to directly reach children in need of help.
Can the Minister say what further support might be offered to charitable organisations facing financial hardship such as Barnardo’s, for which it is likely to be a long time before it is back to business as usual?
Baroness Tyler of Enfield (LD)
My Lords, as we have heard from other noble Lords today, the basic conundrum facing charities is very stark. At a time when demand for their vital services has soared, their resources—both people and money—have plummeted. It is a perfect storm.
The charity Relate, of which I declare an interest as vice-president, has had to furlough around 50% of its counselling workforce. Age UK, which reported an 88% surge in calls in one week, has furloughed 70% of its staff. This comes at a time when the relationships of those cooped up at home are coming under enormous pressure. Many older people seeking help are in great distress about how they will access food and medicines, as well as about financial worries and loneliness. Mental health charities report a surge in demand, both from people with existing mental health problems and from those who have lost their incomes and vital social support networks. Charities providing bereavement services report having to close their services, which provide a lifeline to grieving families in great distress, just as they are most needed.
Charities and volunteers across the land have been stepping up to help communities deal with the devastating impact of the pandemic. As we have already heard, charities have lost out on some £4 billion due to the lockdown measures. The Chancellor’s £750 million support package, while clearly a step in the right direction, is nowhere near enough to prevent good charities across the country closing their doors. As we have already heard, many charities are not eligible. The same applies to the Government’s job retention scheme and business continuity loan scheme, whose criteria exclude many charities.
When responding, can the Minister please say what plans the Government have to establish a stabilisation fund to secure the long-term future of the sector? Will the Government reconsider allowing charity staff who have been furloughed to volunteer back with their organisation to assist with fundraising and other vital direct services? Will the initial £5 million mental health response fund be extended, given the pandemic’s impact on the nation’s mental health?
Lord Mountevans (CB)
My Lords, I add my thanks to the noble Lord, Lord Addington, for securing this important debate at this time. I will make a few points about charities in the maritime sector. Now, more than ever, we are dependent on the seafaring community to maintain the supply lines for food, medicines and other essentials. I note my numerous involvements across the sector, as listed on the register.
Help is needed right across the seafaring community. With severe restrictions in place in ports around the world, many seafarers working on merchant ships are trapped on board without access to shore-based help, with leave cancelled or getting home extremely problematic. Seafarers are often thousands of miles from home and worried about their own health and mental welfare and those of their families, so support from the charity sector is needed more than ever. Fishermen are suffering too, with the market for the catering trade at home and abroad all but dried up and incomes severely impacted.
We have heard in most eloquent terms of the enormous challenges facing the nation’s charities. I would like to highlight the scope and need for charities in the same sector to co-operate and work together wherever possible to maximise effect and benefit. The noble Baroness, Lady Scott of Needham Market, developed this concept most effectively when she spoke about the context of her county.
We are very fortunate in the maritime sector that 10 of our leading funders have got together in the Maritime Charities Group to identify and address the most serious need and to drive best practice. This is done through sharing information, commissioning research, education and so on. From Seafarers UK to Trinity House, member charities of the group are digging deep. Some are raiding their reserves to ensure that seafarers and their communities are supported during the crisis and to sustain the infrastructure of seafarer welfare support around the world. As someone heavily involved in maritime affairs, I think that the Maritime Charities Group operates very successfully to the benefit of the communities it supports. Its example can be relevant for other sectors.
To conclude, and on a separate point, I request that the Minister supports the request from across the uniformed youth sector, including the Sea Cadets, which I know well and where I serve as a vice-president, for early release of money from the Youth Investment Fund to ensure that young people from all backgrounds can continue to benefit from the full breadth of experiences in these invaluable organisations. Without support, these organisations may, I believe, be lost or severely damaged.
Lord Black of Brentwood (Con)
My Lords, I declare my interests as a trustee of a number of charities. This virus is making us all appreciate what is really important to us. One thing that unites many of us is our love of our pets, which are especially important for many lonely and vulnerable people.
The main point I want to make is that our pets, along with the animal charities that care for them, have been impacted by the onslaught of Covid-19 and need support. These charities are doing all they can to help, through, for instance, short-term fostering of pets where owners, including key workers, need respite care when they have been affected by the virus and, crucially, supporting victims of domestic abuse.
However, the emergency presents huge challenges. First, it has reduced the ability of charities such as Cats Protection and the Dogs Trust to rehome stray, unwanted and abandoned animals. A recent survey of members of the Association of Dogs and Cats Homes found that nearly nine in 10 had ceased rehoming, at a time when increasing numbers of domestic animals are being abandoned. During the second week in April, Cats Protection admitted just 47 cats, compared with 690 in the same period last year.
Secondly, there is inevitably pressure on income, with nearly half of those same homes surveyed saying they do not have enough funds to operate for more than three months as a result of the closure of charity shops and an end to most fundraising events. One in five have so few funds they could close at any time.
Finally, as vets are rightly prioritising emergencies, there is limited access for other treatments, especially neutering. As we approach the kitten season, this will mean higher numbers of unwanted litters, placing ever greater burdens on charities that are already under huge funding pressure.
Will my noble friend ensure that animal charities, which are such an important part of civil society and so important to many vulnerable individuals, get the support they need and deserve during this crisis?
The Deputy Speaker
My Lords, I announce that the noble Baroness, Lady Pitkeathley, will shortly take over the Chair from me as Deputy Speaker. In the meantime, I call the noble Baroness, Lady Barker. Baroness Barker?
Since we do not appear to have been able to connect to the noble Baroness, Lady Barker, I call the noble Baroness, Lady Hayter of Kentish Town, and we can reverse the order of these two speakers.
Baroness Hayter of Kentish Town (Lab)
My Lords, this has been a wonderful—indeed, heartfelt—debate with two major themes: first, the vital role of charities during this global crisis, which could see 1.6 billion people lose their jobs worldwide; and, secondly, that more government support is needed to provide the sector with the resilience it needs to protect the lives of others, both now and in the future. If charities founder, it is the beneficiaries who suffer.
It was Warren Buffett, I believe, who said:
“Only when the tide goes out do you discover who’s been swimming naked.”
Indeed. Covid-19 has exposed how very vulnerable many here and across the world are, but in fact many of the needs described today existed before the virus. Perhaps society’s recognition of them has only really happened as the tide has gone out, as I think the noble Lord, Lord Astor, suggested. Those running charities knew, but at the exact time when the demands on those charities have mushroomed, their resources have been seriously compromised. Of course, the price to be paid if charities are unable to respond will be felt by exactly those groups described today: victims of domestic abuse, the homeless, vulnerable children, hospices, advice services and small arts groups—we have heard about all of them—as well as the international ones, mentioned by the noble Baronesses, Lady Anelay and Lady Cox, and my noble friend Lord Liddle.
It is not just beneficiaries who depend on charities; so too do the Government. They depend on them to provide a wide range of services from which the state, over decades, has withdrawn as the supplier. The Government therefore have a duty to step in now to ensure the continuity of these essential bodies, and that means funding.
As we have heard, charities are experiencing acute loss of income, including from voluntary fundraising, such as by my colleague Dan Stevens and his ex-soldier brother Gary, who were due to cycle 88 miles along the Normandy coast on the D-day anniversary to raise money for Combat Stress. Such fundraising is vital for awareness-raising, as well as for the hard cash.
As we have heard, equally dire is the loss of retail income, such as for the British Heart Foundation’s fundraising. The BHF probably cannot access the retail, hospitality and leisure grant, as state aid rules currently cap the amount at €800,000, which would cover only 30 of its 750 shops. Can the Minister explore whether this should not count as state aid, so that charity retailers can claim their full allowances?
Looking across the whole sector, the loss is some £4 billion, against which the Government have allocated only £750 million. Furthermore, that is for additional services needed for Covid-19. It does not begin to address the other continuing issues, particularly the ongoing costs, such as leases, rents, insurance, payroll and DBS checks, which all charities have to carry out, as well as the increased costs of existing work—for example, PPE and IT—which cannot now be met due to loss of income. Indeed, Age UK has warned of closures as charities stand on the brink, while disability charities similarly face enormous battles to meet increased needs. The MS Society sees a 30% drop in income as fundraising events are cancelled, leading it to fear that its ability to continue to support sufferers and fund research hangs in the balance.
Furthermore, as we have heard, some specific areas are not covered, such as medical research. The Brain Tumour Charity, for example, has seen a 70% loss of income, and Diabetes UK and Cancer Research UK have been similarly affected. However, as explained by the noble Baroness, Lady Morgan, and the noble Lord, Lord Sharkey, research charities are unable to access the government scheme because they do not provide front-line services. Therefore can the Minister undertake to work with the Association of Medical Research Charities so that, with a future pandemic, illness or needs charities do not pay the penalty of today’s crisis?
Small charities, often community based, are also feeling the hit, with the small charities scheme managed via the National Lottery Community Fund criticised for being slow and ponderous. Importantly, local charities that get the 80% rate relief are therefore not eligible for the £10,000 small business grants. Could the Minister undertake to see whether that could be changed? We know that the Government are trying to help, and I hope that they will look at the experience in Wales, outlined by my noble friend Lady Wilcox, where the Government are working across the piece with charities to help them survive this crisis.
When the tide next goes out, we do not want to see that our wonderful, unique network of brilliant charities —which engage the volunteering and philanthropy of our citizens—are no longer there when the needs continue, as the noble Lord, Lord Addington, said in opening. It is therefore essential that work now starts on a recovery and rebuilding phase, where voluntary organisations will still be needed to play a major role, as there will be continuing demands on their services even as people emerge from the lockdown. We must ensure their resilience now so that they are there when society—and government—needs their strength, continuity and experience. That means infrastructure bodies able to speak for the whole sector being created where they are currently missing, to co-ordinate and help to establish local networks.
Major funding challenges confronting this sector will remain, and it will require financial support from the state. Government must acknowledge the value of the sector and help to build new capacity, with a long-term underpinning of security so that it can emerge as a sector with a renewed and strengthened voice of advocacy and service for its beneficiaries.
Today we pay tribute to charities, their funders, their volunteers and their staff, for how they have risen to the unprecedented challenge posed by Covid-19. But our appreciation and thanks are worthless if we as a society do not provide the financial support to ensure their own resilience and long-term future. We will need the third sector in the future. How we react now—how the Government act—will determine whether we can again see its strength should the tide once more go out.
The Deputy Speaker (Baroness Pitkeathley) (Lab)
My Lords, I call the noble Baroness, Lady Barker. Is she with us?
Baroness Barker (LD)
I hope I am—I am working under considerable technical difficulties. I draw attention to my interests as held on the register.
The importance of charities is in their existence not as organisations but as vehicles to help the public and others that they care about. What matters is the services that charities provide which others cannot—not the jobs or the revenue, but the impact on citizens. It is a huge and complex sector with an economy worth £42 billion, and charities that are world-leading in their fields. Charities save, protect, support and enhance lives, and they have never been more needed.
This debate, from which several Members of the House have been excluded by the Government, is inadequate to cover the complexity and the details for the subject, and that is rather unsatisfactory. Therefore my first question is to ask when the Government will set aside time for a proper debate. It is needed. The Government’s approach to charities at this time is fundamentally flawed. Look no further than the statement by a Minister in another place, Oliver Dowden, to the DCMS Select Committee the other day—that the Government had made a “horizontal intervention”, applied to all sectors equally. In other words, the Government thought up blanket solutions for business and just rolled them out. Those business solutions do not apply to many businesses, and certainly not to many charities and social enterprises. Will the Government therefore agree as a matter of urgency to meet representatives of the sector who understand charity law and finance, to come up with changes to the existing package to ensure that it works?
Funding so far has been aimed at supporting the NHS to handle the medical emergency. But now the emphasis, the funding and the planning need to change, moving towards supporting community services. Clearly, mental health services have to stay, but we have to move away from the NHS. We have to start to get all those people who signed up to the GoodSAM app to respond to local resilience hubs, instead of within the NHS. We will not get out of lockdown without a massive reorganisation of public services and social care. We need well-organised volunteering if that is to happen.
I want to say a word about the National Lottery, which has for some years used the voluntary sector to deliver its national priorities but has made little investment in voluntary sector infrastructure or development. That needs to change right now. The lottery has to become a supporter of charities as key players in community resilience. Over the last 10 years, funding for local government and volunteering organisations has diminished. While we have the mutual aid organisations, which are brilliant and enthusiastic, they are working in a vacuum at the moment and are largely unregulated.
We now need to start rebuilding, with local government and the sector, a network of local infrastructure. So my questions are these. When will small charities be able to bid for funding from the National Lottery Community Fund, and will this depend on the timing of funding being released from central government departments? How will the voluntary sector and local authorities be able to ensure that lottery funds are properly targeted and not just another burden or distraction? Will the Minister talk to other government departments to see whether there are specialist pots of money and budgets that can be directed towards charities delivering specialist services?
I want to say a word about the Charity Commission, which has responded by relaxing some of its deadlines for filing documents and so on. That is a very good start, but clearly the commission has to start talking to charities about the unprecedented problems being thrown up for them in the current circumstances. Charities need, for example, immediate advice about insolvency and orderly winding-up, given the circumstances in which they currently find themselves.
Another looming issue that needs attention now is the impact on trustees, many of whom are company directors or members of professional bodies. If they are a trustee of a charity that goes into liquidation, they will have to report that and in future say whether there was any further action. So they cannot risk being found to have acted imprudently, for example by running down reserves. Equally, if a person is a director of a company and has become bankrupt, will they be able to remain as a trustee of a charity? The future impact of the pandemic on the availability of trustees is another potential threat to charities that needs to be looked at now so that the Government can avoid a huge problem in two years’ time.
The attitude of banks to charities is very variable. Some, such as RBS and Lloyds, are very good. They understand charities and work extensively with them. Others do not. They all need clearer instruction to get funding out to where it is needed, because, as others have said in this debate, social enterprises have been hit particularly hard.
On CBILS, can the Minister tell us now or in writing how many charities have made claims under that scheme, how many have been processed, and what their total financial value is to date? Will the Government place a cap on the interest rate for CBILS loans after the initial 12-month interest-free period, as debt taken on under the scheme by charities will be very difficult to repay if a charity cannot increase its income? Unlike companies, charities cannot suddenly hike up the price for their services; nor can they suddenly start acting at scale, because most of their activities are labour-intensive. The small business grant scheme provides £10,000 for small businesses in receipt of either rural rate relief or small business rate relief. However, it is not open to charities in receipt of charitable rate relief. Will the Government extend that?
Deferred PAYE has already been a problem for the voluntary sector and seems set to be so again. The Government announced a deferment period for PAYE to deal with the crisis, but the interest payable is 2.5% on each month’s claims for deferred PAYE. It is cumulative, and at a considerably higher rate than commercial loans. Charities just cannot afford to take that on.
We are not asking for help because charities have a right to exist, but because they are crucial to the recovery of the economy and the health of the nation. From food banks to first aid at football and cancer research to social care, we know that the Government cannot save all charities, and nor should they. But by taking a look, alongside people who understand the legal and financial issues specific to charities, they could make better use of the limited resources they have already announced. Crucially, they could design another tranche of funding for the autumn, which would enable charities to still be there to help us when we get out of lockdown and the country starts to recover. Charities built this country and made it what it is. We need them to be there to build a secure and healthy future for us all.
The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Baroness Barran) (Con)
My Lords, I thank the noble Lord, Lord Addington, for securing this debate on such an important subject and at such a critical time for the voluntary sector. I also thank everyone involved in charities and the huge number of volunteers for everything that they have done and will do to be such a key part of the fight against Covid-19.
We have had a varied set of contributions today. I reassure the noble Baroness, Lady Barker, that the limit on the number of speakers was to do with the limits of technology; the Government would have been delighted to include as many noble Lords as wished to contribute to this debate. The debate has provided a valuable opportunity to hear about the many challenges which the voluntary sector is facing during these uncertain times and for me to set out the range of support that has been put in place to help charities to do their important work. I thank each and every noble Lord who contributed so crisply and snappily to this debate for sharing their thoughts and evidence on this topic. I apologise in advance that I will not be able to answer all the questions in the time available, but I will write a letter and of course place a copy of it in the Library.
The noble Baroness, Lady Hayter, painted one picture of the tide going out and what the world would look like without charities, and the noble Baroness, Lady Massey, asked the question without giving us quite such a vivid image. Charities and volunteering are part of the bedrock of our communities, especially in unprecedented times such as these. Whether we are talking about individual acts of kindness, volunteering efforts or more formal charitable work, they all stem from the same thing, which is a desire to solve a range of problems, create opportunities, and give people a chance to contribute and feel valued. Indeed, my noble friends Lady Hodgson and Lady Anelay, the noble Baroness, Lady Sheehan, and the noble Lord, Lord Liddle, highlighted the global role that we play, both as a funder of charities internationally and in international NGOs. I will talk to colleagues in DfID to make sure that I am able to answer a number of those questions.
The noble Baroness, Lady Barker, suggested that I talk to stakeholders in the sector about changes to the package announced. I reassure her that I am in daily contact with civil society organisations large and small—indeed, I should be on call with them right now—about the impact of Covid-19, and I have a weekly call with civil society leaders. That goes on alongside a range of other meetings which senior officials have with charities and social enterprises.
The noble Baronesses, Lady Hayter, Lady Barker and Lady Jolly, the noble Lords, Lord Hunt of Kings Heath and Lord Burnett, and my noble friends Lord Astor of Hever and Lord Black of Brentwood all talked about the incredibly wide range of civil society organisations and how they are experiencing increased demand on their services while at the same time dealing with a reduction in their income, because they are unable to pursue previously planned fundraising or trading activities. In particular, I thank the noble Lord, Lord Harris of Haringey, for the work that he leads at the Institute of Fundraising on increasing transparency and trust in public fundraising.
This situation is forcing many charities to make very difficult decisions, be that reducing services and furloughing staff, cutting into their reserves to keep services running at this vital time, or indeed considering mergers in some cases, as my noble friend Lord Leigh of Hurley described. These organisations have also been co-operating very constructively, as the noble Baroness, Lady Scott of Needham Market, and the noble Lord, Lord Mountevans, mentioned.
I will briefly remind the House of the diversity of the charity landscape before turning to the Government’s announcements, so that we can take those announcements in context. A number of slightly different figures were cited during the debate, but there are around 170,000 charities in the UK, of which almost half, or 80,000, have an annual turnover of less than £10,000. In practice, this means that they are almost entirely staffed by volunteers. A further 58,000 organisations have a turnover of less than £100,000, so 96% of organisations in the sector have a turnover of less than £1 million, and only 4% or 6,000 organisations have income above £1 million. I say this to provide the context in which to consider the funding that we have announced.
The measures aimed at businesses announced by my right honourable friend the Chancellor of the Exchequer in March will go some way to support many charities and social enterprises through this period of uncertainty, particularly those with paid members of staff, premises and trading activities. This includes many of the 6,000 or so larger charities with income above £1 million. I note the questions from the noble Baroness, Lady Thornton, regarding social enterprises. Charities and social enterprises can access the Coronavirus Job Retention Scheme, which allows them to furlough staff and apply for a grant that covers 80% of their usual monthly wage costs.
My noble friend Lord Wei, the noble Lord, Lord German, and the noble Baronesses, Lady Sheehan and Lady Tyler of Enfield, asked about the furloughing scheme and why staff cannot volunteer for their own charities. The purpose of the scheme is to support people who would otherwise have been made redundant. In order to prevent fraudulent claims, we have been clear that individuals cannot work or volunteer for their own organisations. This also protects individuals; if we allowed workers to volunteer for their employer, the employer could effectively ask them to work full time while paying them only 80% of their wages.
I note that many charities have already taken advantage of the scheme—we heard examples today. My quick review this morning showed that from just a very short list of charities those savings will amount to over £125 million in the next few months. Charities can also defer their VAT bills to the end of June, will pay no business rates for their shops next year and may be eligible for the Coronavirus Business Interruption Loan Scheme.
In addition, while charities are already eligible for 80% business rate relief via the charitable rate relief, charity shops and other premises used for retail, hospitality and leisure will benefit from access to the expanded retail discount scheme at 100% for 2020-21. My noble friend Lady Anelay and the noble Lord, Lord Liddle, asked whether I would meet the Charity Retail Association. I would be delighted to do so.
The noble Baronesses, Lady Pitkeathley and Lady Barker, asked whether there were any changes to business schemes to make them more applicable to the charities sector. I am delighted that the Coronavirus Business Interruption Loan Scheme now permits charities and social enterprises with less than 50% of their income coming from trading to apply for the scheme. I will update the House on the new 100% government-guaranteed bounce-back loans when more information is available in early May. The noble Baroness, Lady Thornton, will be aware that grants and loans to address cash-flow problems are being made available by Big Society Capital specifically for the social enterprise sector.
Turning to the measures announced on 8 April, as almost all noble Lords noted, the Government pledged £750 million to the charity sector. This is focused on supporting those charities that are responding to Covid-19 on the front line or providing services that protect our NHS and care sectors, ensuring that charities and social enterprises can continue their vital work supporting the country during the coronavirus outbreak. This unprecedented commitment is in recognition of all the issues raised by noble Lords this afternoon around the unique challenges facing the sector.
Of this, £360 million will be allocated by central government to charities and social enterprises in England based on evidence of service need. The noble Baroness, Lady Finlay of Llandaff, paid tribute to the extraordinary work of hospices in this country. This funding will include up to £200 million of support for hospices, with the balance going to a range of organisations such as St John Ambulance and citizens advice bureaux, addressing some of the advice needs that the noble Lord, Lord Low, rightly noted as crucial in early intervention, and to organisations supporting vulnerable children, food banks, victims of domestic abuse—as the noble Baroness, Lady Uddin, noted—and other critical areas.
The noble Lords, Lord Mendelsohn and Lord Sharkey, and the noble Baroness, Lady Morgan of Drefelin, asked about support for medical research and wider health charities. I know that my colleagues in the Department of Health and Social Care have been liaising with charities in this sector to identify how best to support them. I will confirm with them whether it is more appropriate that they or I meet with the Association of Medical Research Charities, as the noble Baroness, Lady Hayter, suggested.
A further £370 million will support smaller, local charities and social enterprises working with vulnerable people. This is an area that my noble friends Lady Morgan, Lord Kirkhope and Lady McIntosh of Pickering, and the noble Lord, Lord Bilimoria, all referred to. I am surprised at the sense among your Lordships that small charities might get missed in our planning. We believe that this funding will make a significant difference to many of our small but vital charities, which in turn deploy and manage literally millions of volunteers around the country. In England, this support will be provided through the National Lottery Community Fund. Government will allocate £60 million of this funding through the Barnett formula so that devolved Administrations are funded to provide similar support in Scotland, Wales—where the noble Baroness, Lady Wilcox of Newport, cited a number of challenges—and Northern Ireland. This will provide support to thousands of charities on the front line helping vulnerable people affected by Covid-19. The noble Baroness, Lady Cox, and the noble Lord, Lord Purvis, asked about eligibility criteria. As soon as those are publicly available, I will share them with your Lordships.
Finally, the Government will match the public’s generous donations pound for pound—which as of today have reached £35 million—to the BBC’s “Big Night In” fundraising event last week. The first £20 million of government match-funding will go to the National Emergencies Trust appeal. The remainder will go to Children in Need and Comic Relief for onward distribution to key charities in many of the sectors noted by your Lordships, including food banks, homelessness, domestic abuse and, critically, vulnerable children and young people impacted by the pandemic—as referred to by the noble Baroness, Lady Benjamin, and the noble Lords, Lord Loomba, Lord Mountevans and Lord Addington. I am aware that grants from this funding are already going out, with charities having been pre-screened by the funders concerned.
My officials and I have been working with the different appeals and are identifying how we can help co-ordinate the distribution of funds so that charities receive grants quickly and with a minimum of the bureaucracy to which my noble friend Lady Morgan of Cotes referred and, most importantly, so that need on the ground is met. The noble Lord, Lord Turnberg, talked about the role of philanthropists. We are working on plans to talk to and liaise with philanthropists in this sector—the noble Baroness, Lady Prashar, also raised that point.
At this point, I want to commend the National Emergencies Trust for its work. When I last looked, it had already distributed over £22 million to local communities. I note in particular its proactive outreach to black and minority-ethnic organisations, given the terrible impact of Covid-19 on those communities. I have been heartened to see how open the organisations involved are to working together and learning from one another.
More broadly, the British public have been extraordinarily generous in supporting local NHS charities, led inimitably by the wonderful Captain Tom Moore. There have been major corporate donations, too, such as £100 million from Barclays Bank and a major donation from Tesco. Time does not permit me to mention them all, but the national response has been truly outstanding.
I note also the £160 million package of funding for arts charities announced by Arts Council England, supporting important work and securing the future of some of our major museums and arts charities. The noble Baroness, Lady Watkins, raised important points about smaller museums, which I shall discuss with my honourable friend the Minister for Culture. I agree entirely with the noble Baroness, Lady McIntosh of Hudnall, about the role of creative activities in helping young people cope with the impact of Covid-19 on their mental health. The right reverend Prelate the Bishop of St Albans and my noble friends Lord Marland and Lord Wei talked about incentives for giving, including around gift aid. I would be happy to explore those in more detail and to raise them with colleagues in the Treasury.
I stress that this package of support is unprecedented in scale and goes beyond the funding that the Government have made available to other sectors. We will not be able to save every business or every charity, but in response to questions from the noble Lord, Lord Sharkey, and the noble Baroness, Lady Pitkeathley, we will continue to engage proactively with organisations across the voluntary, community and social enterprise sectors, so that we maintain a complete picture of the impact of coronavirus on the organisations and, of course, the people they serve. I will endeavour, on behalf of the noble Lord, Lord Hastings, to liaise with DfE colleagues on his point about university funding.
Lastly, I acknowledge the work undertaken by the leading grant-making foundations, including the National Lottery Community Fund. Many of these have changed their guidelines to make funding more flexible and easier to access. While I understand the concerns of the noble Lord, Lord Purvis, about delays in funding for non-Covid related work, I think he will understand that many funders have had to prioritise in the current circumstances.
On volunteering, we have seen an overwhelming response from the public, expressing their willingness to step up and volunteer to help those in need during this time. We have seen this through local volunteer networks such as the 3,500 Covid mutual aid groups that have sprouted up on Facebook, WhatsApp and Nextdoor, as well as the incredibly important established charity networks, large and small, which have been able to respond quickly and effectively, based on a deep knowledge of their communities and trusted local relationships. Having had a wonderful visit with the noble Baroness, Lady Scott of Needham Market, to her local community organisation, I can tell noble Lords that it is an exemplar of all those things.
The magnificent response to the launch of the NHS Volunteer Responders service is testament to that generosity. Within a few short days, 750,000 people have signed up to lend their support to the NHS and to people in their communities. My noble friend Lady Sater suggested taking time to reflect on how we channel this volunteer energy in future, and I would be delighted to meet her. More broadly, we are working with the sector, including the Voluntary and Community Sector Emergencies Partnership, to support wider volunteering activity and make sure that existing, experienced organisations have the capacity to continue to deploy volunteers where they are needed most. I have a weekly call with half a dozen different local volunteering networks, and I am absolutely blown away by what they achieve.
Finally, we are also grateful to the Charity Commission for its work during this crisis, particularly on the guidance it has provided for charities in difficulty. In closing, I reassure noble Lords that everyone at DCMS has been working tirelessly to ensure that civil society is in the best possible place to get through this unprecedented time. We will continue to work closely with the sector to understand and respond as well as possible. We are all proud to see the work being done at a national and local level by volunteers, charities and social enterprises to support our country at this time.
I congratulate those organisations which have shown incredible agility in reconfiguring their services to operate virtually and collaborating in ways that none of us could have imagined possible. As the noble Baronesses, Lady Hayter and Lady Barker, both remarked, we will need more of this creativity and pragmatism as we plan for the months ahead. If there is one positive thing that we can perhaps take from this incredibly difficult situation, I hope that the spirit of coming together that has been forged during this crisis will strengthen our social ties and sense of connection for many years to come. We have found new ways to be close while having to be physically apart. I think we have all found and understood how each one of us is vulnerable, but also how each one of us can help someone else. We have all adjusted our ways of living and working to an unimaginable extent. Our challenge, and the challenge for those working in the voluntary sector, is to sustain this response.
I spoke recently to the leader of a small charity in Hartlepool who said to me, “We are aiming for our response to be like a candle, not a match.” I think that is a very good goal for us all. In this new social contract, civil society will have a vital contribution to make. I look forward to working with the sector in all its variety to achieve this in the weeks and months ahead.
Lord Addington
My Lords, I thank everyone who has taken part in this debate, particularly the Minister for her detailed response. I hope that when the guidance is published, the department will heed my vision that it be easy to understand by non-professionals. I got a smile there, which we do not often get. I think that is a key thing for everybody taking part in this: whatever we do, it will probably not bring us back to where we were, but to get to the best place we must be able to understand what is being done. That was a message I took from everyone in the debate and I hope we can all actually gather together to see that, even if we do not agree that the Government are doing all of what we want, at least what they are doing is done well. Having said that, I thank all noble Lords for taking part and I look forward to the next time we discuss the issues that have been raised here.