Government unveils long awaited package of support measures for the sector
Ministers announced a £42.5m action plan on 9 February 2009 to help volunteers, charities and social enterprises to support the sector during the current economic downturn...
In other words, the recession has played a significant part in the targeting and direction of this support. Further detail on who qualifies for the various elements of the package and how to apply for the support is expected shortly. Real help for communities: Volunteers, Charities and Social Enterprises comprises the following set of measures:
Meeting demand for services and tackling unemployment
- Up to £10m investment in a volunteer brokerage scheme for unemployed people. This is designed to create over 40,000 opportunities for them to learn news skills and give back to communities through volunteering. This starts in April 2009, covers England Wales and Scotland and allows jobseekers who have been unemployed for at least six months, and feel that volunteering will help them get back to work, to access suitable, work-focussed placements without their benefits being affected.
- A new pilot accreditation process and independent ombudsman for the DWP’s Code of Conduct to ‘better protect the interests of smaller, specialist and third sector welfare to work providers.
- A £15.5m ‘community resilience fund’ to provide grant funding to small and medium providers in the most deprived communities. This is on top of the £130m already committed to the Grassroots Grants programme to increase support for community groups (launched in April 2008 and has distributed over 2500 grants to small organisations so far).
- A national campaign to raise awareness of the Government’s commitment to pay all invoices within 10 days which will improve cash flow for small organisations.
Strengthening the sector now and in the future
- A £16.5m modernisation fund to help with the cost of mergers, partnerships and moves to more efficient sharing of back office functions for at least 3000 third sector organisations. OTS Minister Kevin Brennan has clarified that the impetus to find these synergies must come from the sector itself; while the Charity Commission, as an independent legal entity has a responsibility to actively check relevance and viability while providing support and information on mergers and joint working. This potential ‘has yet to be fully realised’ by the sector; according to research undertaken by the regulator.
- A 0.5m investment in the ‘School for Social Entrepreneurs’ to double the number of people it trains to become social entrepreneurs, particularly those working in deprived communities. In addition the Department for Innovation, Universities and Skills (KIUS) is publishing a ‘third sector strategy’ based on consultation sometime in the summer of this year. The Minister for the Cabinet Office, will also be establishing
- Although not part of the financial package, the OTS has confirmed that with Gift Aid worth £888m to charities in 2007/08 and the predicted potential impact of the economic downturn on charitable giving, more is going to be done to promote the importance of corporate giving and enable tax-effective giving. While decisions regarding further Gift Aid and VAT reform are the remit of HM Treasury, the OTS has confirmed that further reform is being explored. Some research by HMRC on the likely behavioural effects on donors of redirecting the higher element of Gift Aid to charities is expected this autumn.
- The government has accepted that its existing support for business is not always appropriate for third sector organisations (for example when only a small percentage of their income is generating through trading), hence its investment in the Futurebuilders Fund, the CommunityBuilders Fund and the DoH’s Social Enterprise Investment Fund. And it accepts that social enterprises and social investors do face certain barriers when accessing existing investment incentives. An independent review by NESTA is being taken to ‘bring greater clarity, understanding and awareness of the existing framework, including the impact on investment in deprived aresas and Community Interest Companies (CICs).
Kevin Brennan, Minister for the Third Sector said ‘The third sector is brilliant at knowing how best to provide real help for people who need it most. We need to make the most of the skills and expertise the sector has to offer – helping people through times of change and change, finding new and more equitable ways of doing business through social enterprises, and empowering people to transform their lives and their communities’
Stephen Bubb, CEO of ACEVO welcomed the package as a ‘welcome start. He added ‘more will undoubtedly be needed as the recession unfolds, and in two or three years this may amount to a total of £500m. We look for real action on Gift Aid in the Budget and the quick establishment of a social investment bank to build a major package of support for the sector to help those most at need. We are now working closely with the DWP on job creation. The sector not only needs to support the most vulnerable victims of the recession, but it needs to be at the forefront of recovery’
Stuart Etherington, CEO, NCVO said: ‘We cautiously welcome the Government's announcement of £42.5M. We see this help as a start as we are just at the beginning of the recession. The two key things we asked for in the modernisation fund and resilience funds are in the package of support. Charities will also have access to the BERR scheme in addition to this. It is important that the Government and the sector continue to monitor the situation and that we target additional resources as and when is necessary.’
However, charity restructuring adviser Ian Oakley-Smith of PricewaterhouseCoopers LLP commented ‘Sadly, there are many charities that continue to exist without adequate reserves in place to cushion the effects of a downturn. This fund may provide a lifeline for some of those and allow them to move ahead with confidence. However, Trustees will still need to assess the potential medium term effects of the current climate on income and ensure that their charity adapts appropriately.’
www.cabinetoffice.gov.uk/third_sector/real_help_for_communities.aspx
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