Small Charity Sector

Joe Robertson Excerpts

Tuesday 3rd March 2026 Westminster Hall

[Joe Robertson (Isle of Wight East) (Con)]

It is a pleasure to serve under your chairmanship, Sir Roger. I congratulate my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) on securing this important debate. Few others—indeed, perhaps no one else in this place—have done more over the last 20 years to champion the causes of social justice, a field in which many of our small charities operate.

Over the last five years, the charity sector has faced unprecedented pressure, with donations falling and volunteer numbers still not recovered to pre-pandemic levels. Rising costs driven by the autumn Budget, increased national insurance contributions and post-pandemic expenditure outstripping income have placed a strain on small charities, limiting their ability to support local communities. These organisations remain consistently underfunded and frequently overlooked, and the current funding model is proving unsustainable for too many. Small and medium-sized charities with incomes under £1 million account for 97% of all charity closures in the past decade.

Financially, the current system works against small charities, favouring large, well-established organisations with the capacity to navigate complex processes and absorb financial shocks. Too many smaller charities are excluded from the core unrestricted and multi-year funding that would give them the stability and ability to plan ahead. Instead, they are often trapped in cycles of short-term grants, burdensome applications and reporting requirements that, for them, are often disproportionate to some of the modest sums available. Meanwhile, 88% of charitable income in England and Wales goes to just 5% of registered charities, leaving the remaining 95%—the small charities that form the backbone of the sector—far more vulnerable to declines in public giving. Without a shift in Government focus towards these organisations and the vital role they play in their communities, that gap will only continue to widen.

Small and medium-sized charities are often better placed than large national charities to know their communities and to deliver lasting change in people’s lives. A number of charities on the Isle of Wight do just that. For example, Aspire is a community hub that runs food pantries, suicide prevention programmes and the award-winning “Living Well and Early Help” service. More recently, it has opened accommodation in Ryde for women who would otherwise face being homeless. We also have the award-winning Tidal Family Support centre and PATCH—the People’s Approach to Cancer Help—which helps people with the costs of accessing health appointments across the Solent on the mainland. Community Action Isle of Wight and the Bay Youth Project do important youth intervention work in Sandown, Lake and Shanklin.

Such smaller charities are often more agile in responding to the needs of their communities, typically spending a lower proportion of their income on fundraising and lobbying so it can go directly to delivering on their charitable objectives. Many funders value that closeness, preferring to support organisations that have deep, long-standing relationships with the people they serve. Charities often focus on meeting immediate needs, allowing them to respond quickly to people in their local communities, yet many corporate donors feel it is harder to justify supporting smaller charities, partly because they have fewer resources to showcase their work. Some national charity brands are, of course, used by local charities, such as Age UK Isle of Wight—and Age UK is in many constituencies and areas across the country. There is often a misunderstanding that they benefit from central donations, but very often they are in fact small, local charities, entirely reliant on local fundraising—notwithstanding the benefit of that brand association with an excellent national charity such as Age UK.

Smaller charities are often so absorbed in day-to-day delivery that they lack the capacity to analyse evidence and present impact in the way that funders increasingly expect, which leaves them at a disadvantage when bidding for support. Smaller charities can also lack meaningful avenues to feed their experience into national policy, with few mechanisms in place for Government to learn from their frontline insight. Their limited national influence, stemming from the absence of large public affairs teams, stands in stark contrast to the growing professionalisation of major charities—which in itself is of course a good thing.

I am pleased to have been appointed as a commissioner to the Centre for Social Justice’s midlife mission, looking at how to support people approaching midlife and beyond to thrive in the labour market. The CSJ aims to bring together more than 1,000 small charities to give voice to and inform the work that they are doing.

I now address the Minister directly. Last year, the Government announced the creation of the Office for the Impact Economy, intended to help Whitehall to identify, source and build partnerships to scale the social impact of public investment and expand opportunities across the country. Since that announcement, however, there has been no public update on how that initiative is being implemented, or how the associated funding is being used.

I ask the Minister this: first, to what extent does she recognise match funding as a core tool for leveraging public funds, and what steps are being taken to expand its use across Government? Secondly, what mechanisms does the Department have in place to ensure that small and medium-sized charities can engage meaningfully in tenders, grant applications and policy consultations, and that the administrative burden of doing so does not exclude them? Finally, will the Minister establish a £585 million evidence fund, as recommended by the CSJ, paid for through one year of unclaimed gift aid, enabling small charities to demonstrate impact and to compete more effectively for contracts and grants?