Charitable and Voluntary Sector — House of Lords, 2020-04-30
Topic: Social Welfare
Elizabeth Barker (Liberal Democrats, Centre to centre-left): 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.