Small Charity Sector

Wera Hobhouse Excerpts

Tuesday 3rd March 2026 Westminster Hall

[Wera Hobhouse (Bath) (LD)]

It is a pleasure to serve under your chairship, Sir Roger. I thank the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) for securing this important debate.

I hear time and again from local Bath charities that they are disadvantaged due to their size. They are incredible, committed and dedicated niche charities, doing excellent work in our communities. Because they are small and locally focused they can deliver swift, sensitive and tailored personal services to the people who need them, but they are disadvantaged because they are small. They are disadvantaged because they cannot afford a team of experienced bid writers who know the tips and hacks to unlock the larger funding schemes, and because they are all going for the same pots of funding at the same time, for largely the same aims. They are also disadvantaged because they lack the economies of scale that benefit the nationals, and the central infrastructure to navigate onerous administration, monitoring and governance rules.

I recently convened a roundtable of smaller charities all working in the domestic abuse space in Bath, to hear about their challenges. Outstanding local charities such as Southside, the Nelson Trust, Developing Health & Independence, Voices, Society Without Abuse and Julian House attended, along with our local authority partners, officers and councillors, who are vital elements for policy setting, commissioning and delivery. Bringing them together created a space to work towards a more joined-up response for domestic abuse victims and survivors in Bath, working together rather than competing with each other.

Overwhelmingly, I heard from them how the fragmentation of local delivery impeded their effectiveness, and how partnerships and collaborations were key to reducing that. As a result, regular roundtables are now taking place, at which they share best practice, limit duplication of support to some clients, and locate the gaps in provision to others. It is an opportunity to map out a clearer, more collaborative and less fragmented domestic abuse pathway for local organisations. We are creating a space where charities can build rapport with one another while discussing some of the issues that the sector faces.

I hope that will begin to eliminate the barriers that smaller charities face due to the administration, monitoring and governance issues that the large national charities navigate with relative ease. I hope that in this way we can ensure that the size of a charity never determines the difference that it can make. While I echo the concerns that have been raised today, I very much hope that my example from Bath can help other hon. Members and the charities in their local areas.

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[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Stephanie Peacock)]

It is a pleasure to serve under your chairship, Sir Roger. I congratulate the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith) on securing this important debate. His commitment to small charitable organisations is evident not only in his speech, but through his work in that area, and indeed in this place, over many years.

I begin by paying tribute to small charities and the critical support that they provide to people across the country, which has been highlighted today. Small charities make up the vast majority of the voluntary community and social enterprise sector. Those responsive, locally engaged groups are often best placed to understand the strengths, capabilities and cultures that make up their local communities. In this debate, we heard a number of examples, and I want to mention a few of them.

The right hon. Member spoke about Ripple, based in Portsmouth, and about how, in response to personal tragedy, it set up a lifesaving tool. It is incredibly important that he shared that example with the House today, and I will reflect it to the relevant Minister. My hon. Friend the Member for Alloa and Grangemouth (Brian Leishman) spoke powerfully about a number of charities, as did Members from across the House. My hon. Friend the Member for Southport (Patrick Hurley) said that Greta, a representative of one of his local charities, is here in Parliament. I join him in welcoming them.

The hon. Member for Dumfries and Galloway (John Cooper) raised important issues, such as digital poverty, that affect rural communities. I pay tribute to the hon. Member for Bath (Wera Hobhouse), who shared an example of her work bringing local domestic violence charities together; I am pleased to hear that that work is ongoing. The right hon. Member for Salisbury (John Glen) raised a specific question about Pride in Place. It is a policy led by the Ministry of Housing, Communities and Local Government, and I have met with the relevant Minister. The policy is grounded in local leadership, but I will ensure that the right hon. Member’s points are put to that Minister and will write to him accordingly.

The hon. Member for Strangford (Jim Shannon) raised the importance of small charities in tackling food poverty, something that I have seen in my constituency. That point was also made by the hon. Member for Birmingham Perry Barr (Ayoub Khan); I will write to him about his specific question, but I will touch on some of the points he made later in my speech. I congratulate the shadow Minister, the hon. Member for Isle of Wight East (Joe Robertson), on his new role at the CSJ, and will address some of the points he put to me later.

Yesterday I met a range of charitable organisations at events hosted by the York Centre for Voluntary Services and the Kirklees Better Outcomes Partnership. Those charities play a vital role in their local communities, giving a voice to those living in poverty, supporting unpaid carers and empowering women, often victims of domestic violence, to improve their lives. In my area of Barnsley, whether it be BIADS—Barnsley Independent Alzheimer’s and Dementia Support—of which I am a patron, or the world-class Barnsley Youth Choir, small charities are at the forefront of innovation and social change.

In last month alone I have met two great small charities from across the country: the Family Volunteering Club, a small charity led by Maddy Mills, creating opportunities for young children and their families to volunteer, and Ruff & Ruby, a King’s award-winning youth charity carrying out important work in Stoke-on-Trent. Ruff & Ruby has the UTH CITY app, which connects young people with resources, education, employment, volunteering and suicide prevention. Indeed, my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell) gave some excellent examples of its work, and I was pleased to visit his area last year to meet a number of charities and hear at first hand about the work they are doing.

I acknowledge the financial pressures faced by the sector. The hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) and a number of others put to me points around national insurance, which we have debated a number of times, and a specific point about VAT. That is an issue for the Treasury, but I will reflect his request to the relevant Minister and write to him. We want to reduce administrative burdens on businesses, including charities, by a quarter by the end of this Parliament. Last October, I set out a series of changes to the financial thresholds for charities that will come into force this year. These will save charities an average of £47 million each year, while ensuring that the regulation of the sector remains proportionate.

The civil society covenant, which represents a fundamental shift in how Government works with the sector, is a recognition of the value that civil society brings, and a commitment to work in partnership to deliver better for citizens and communities. I was pleased to meet a number of civil society organisations at London City Hall towards the end of last year to discuss how the civil society covenant can help the Government to connect with the whole sector. In that context, I do not recognise the right hon. Member for Chingford and Woodford Green’s characterisation that the Government do not listen and engage, or that they simply take small charities for granted. I acknowledge that we can always do better, but the covenant is about having the ambition to do exactly that.

The Department for Culture, Media and Sport has launched an £11.6 million local covenant partnership fund. The fund will support local government, public service providers and civil society organisations to work collaboratively to tackle local policy priorities and better meet the needs of local communities. Outside this place, I know that there have been questions from charities regarding the Digital Markets, Competition and Consumers Act 2024; while that question has not been raised in this debate, I make it clear to Members and the sector that charities can continue to claim gift aid where eligible and compliant with consumer law, where it applies.

I met with the Chair of the Culture, Media and Sport Committee, the hon. Member for Gosport (Dame Caroline Dinenage), and the shadow Secretary of State, the hon. Member for Droitwich and Evesham (Nigel Huddleston), to discuss the topic last week, alongside colleagues from the Department for Business and Trade. I am aware of the sector’s concerns and I am committed to working with colleagues in DBT and His Majesty’s Revenue and Customs on the issue. I wrote to the Chair of the Committee today in response to her letter to me on Friday to provide an update and confirm that, in relation to gift aid, secondary legislation is not necessary at this time.

I will touch on some of the broader DCMS and Government support for charities, answering a question put to me by my hon. Friend the Member for Wrexham (Andrew Ranger). Last summer, DCMS published the Government’s first ever dormant asset strategy, mapping out how the £440 million of funding will be distributed. That will include £132.5 million to benefit young people and £87.5 million for social investment. Funding will go towards providing small, affordable loans to grassroots organisations alongside tailored support to help small enterprises to grow and become more financially resilient. I recognise that there is a need to support more civil society organisations to grow their income from public sector contracts. At present, civil society organisations secure just 4% of the total value of those contracts, a figure that has remained unchanged for the past 10 years.

The national procurement policy statement published in February 2025 underlines the Government’s commitment to strengthening the UK economy by maximising opportunities for civil society organisations to access public contracts. That is a clear signal that the sector’s expertise and value will be recognised and supported throughout the public sector, highlighting our ambition to make it easier for civil society organisations of all sizes, and small and medium-sized enterprises, to deliver public contracts. I think that answers the point made by my hon. Friend the Member for Southport.

[Wera Hobhouse]

Does the Minister agree that small local charities cannot compete with national charities? We have made that point time and again, but she has not made any comment on how competition can be achieved or how local charities can get priority. I have many examples in Bath where a national charity gets a bid through the bidding process but does not deliver as well as a local charity. We find that out afterwards, but then it is too late.

[Stephanie Peacock]

That is a very fair point, and one that I have seen in my own constituency of Barnsley. In the interest of time, I will not share the details of my example, but I will take that point away and write to the hon. Lady directly on it. We want to address that specific point through the covenant.

Moving on to the second point of my hon. Friend the Member for Southport about tax reliefs for charities, charities and their donors received around £6.7 billion in tax relief in the 2024-25 tax year. The long-running gift aid scheme has raised over £1.7 billion alone during that period. I attended a roundtable hosted by Amazon and co-chaired by Gordon Brown on the new VAT relief for business donations on goods to charities. As the Chancellor announced at the Budget, that new relief will increase the supply of essential items available to charities and make it easier for businesses to support charitable work. The former Prime Minister deserves huge credit for his leadership on that issue throughout his establishment of Multibank.

As he outlined in his speech, the right hon. Member for Chingford and Woodford Green and the Centre for Social Justice have a keen interest in growing philanthropy in the UK, especially for small charities. A number of other Members raised that issue too. We recognise that many small charities rely on donations from the public to support their work, and while I am aware that there is more work to do, I acknowledge the £15 billion that was donated last year. We want to better connect, unlock and partner with philanthropists to mobilise private funds for public good, a point put to me by the hon. Member for Eastleigh (Liz Jarvis). I recently chaired a roundtable on that subject, bringing together philanthropists, business leaders and other Government Departments to discuss how we can build philanthropic giving into Government missions.

We are committed to a place-based philanthropy strategy. That will set out how the Government can create an environment that encourages philanthropists to support local communities and ensures that the benefits of philanthropy are felt nationwide. Indeed, the hon. Member for East Wiltshire (Danny Kruger) raised the issue of philanthropy being a priority for the City of London. I was pleased to attend and speak at the Giving and Impact summit last year at the London Stock Exchange.

The shadow Minister mentioned the Office for the Impact Economy. Launched by the Prime Minister, it is the Government’s new central hub for investors, philanthropists and businesses looking to make social impact. The office will make sure that charities can access funding beyond traditional grants and give direction to individuals and organisations looking to make a difference. I am happy to set up a meeting for Members who are interested in that area with the new office, so please do contact me.

We cannot debate charities without mentioning volunteers. Volunteers keep charities running, with around 12 million volunteers giving their time and commitment each year. Yesterday in York, I met the National Association for Voluntary and Community Action, which shared with me the work it does to encourage people to get involved in a variety of ways. It was a particular pleasure to speak to the young volunteers, and I wish the York Centre for Voluntary Services the very best with its volunteering fair tomorrow, which will bring together many charities from across their city.