Charitable and Voluntary Sector

Baroness Pitkeathley Excerpts

Thursday 30th April 2020 Lords Chamber

[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.

--- Later in debate ---

[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?