That the Virtual Proceedings do consider the fundraising and organisational challenges faced by the charitable and voluntary sector during the COVID-19 pandemic.
The Motion was considered in a Virtual Proceeding via video call.
My Lords, it is a great honour to lead a debate that has been so oversubscribed. I say a tremendous thank you to everybody who put their name down, and an even bigger one to all those who tried and failed. It is a pity that we could not find slightly longer for this, but I trust that the Whips’ Office, et cetera, will be able to make sure that we have a chance to discuss other aspects of this subject in the near future.
What inspired me to think about this is the fact that the charitable sector is an incredibly important part of our society. It supports virtually all aspects of things that we do and is a very big unit unto itself. If the Library’s briefing is to be believed, and it normally is, 870,000 people work in the field. It had an income in 2017 of something like £17 billion-plus and is approaching 1% of gross domestic product. That is a big area of activity. Virtually all aspects of life have a charitable input into them. Education, care, support, social activity, the arts and sport are all covered and interact with it in certain ways, as do virtually all commercial activities. This is something we must take seriously and pay attention to, not only during the crisis but as we exit it. Everything I will say here is based on the assumption that this will end at some point.
Today has been what I describe as a blue day for news—we have had good news that possibly a treatment is out there. The red days are when we hear about things that are not going so well; but we are on a blue day today, so let us be hopeful that this situation will end. Until it does, we must bear in mind that there is a huge amount of pressure on this important sector. It has been estimated in the Library briefing—to which slight changes have been made—that in 12 weeks of lockdown it is possible that the voluntary and charitable sector will lose £4 billion. The Government have put in £750 million, which is welcome—and I appreciate that other government measures have also been taken to help—but at the Library’s estimate, this covers only 18.7% of the loss.
We must look at how charitable organisations can survive to meet the needs that will still be there at the end of this period. One reason why I thought this an appropriate subject of debate for the House of Lords is that I do not think there is another group in the country that has as much interaction with, or knowledge of, charities. I do not know how many times we talk about people from the sector who brief us. I draw the attention of the House to my declared interests as president of the British Dyslexia Association and as a trustee of the Atlas Foundation—very different charities covering very different sectors—and I am involved with others as well. All were formed to act on issues that existed before the pandemic and the lockdown occurred. I hope that charities will be there to take on these issues afterwards, but unless we can find ways of supporting them through this they will not be. Without them, we will find ourselves with huge holes in sectors that make life effective and tolerable.
My Lords, I welcome the significant measures that the Government have taken so far to reduce the impact of Covid-19 on the ability of charities and the voluntary sector to continue their valuable work.
I want to refer to the challenges faced by charities whose main work is carried out overseas, especially in countries that are eligible for overseas development assistance. Like others, they face huge financial losses incurred by the immediate loss of income from charity shops and fundraising events. Oxfam, for example, is asking that the Government meet urgently with charity retailers to discuss limitations to the Retail, Hospitality and Leisure Grant Fund and to find a solution that works for the high street while complying with EU competition rules.
The extra challenge is the uncertainty about the amount that charities might receive in project support funding from DfID. This month, the Office for Budget Responsibility estimated that the UK economy is expected to contract by 12.8% this year, thus shrinking the size of the 0.7% of gross national income allocated to ODA. Some in the media have expressed concern about continuing ODA when we face Covid-19 here. Surely it is right to help charities to continue their ODA-funded work, which supports, for example, the provision of vital basic health services.
It makes economic sense too. Abiy Ahmed, the Prime Minister of Ethiopia, said recently:
“Access to basic health services remains the exception rather than the norm … If Covid-19 is not beaten in Africa it will return to haunt us all.”
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.
My Lords, I declare my interests as chair of the Association of Medical Research Charities and of the Specialised Healthcare Alliance, a coalition of over 100 charities representing patients with rare diseases. I will make two points.
The first is about charity-funded medical research. Medical research in the UK depends very significantly on charity funding. Last year, AMRC members contributed £1.9 billion, about half of all public funding. However, Covid-19 has reduced charities’ incomes very significantly, and this is turning into a large reduction in research spending, probably at least £250 million for 2020-21. Already, more than half of AMRC’s members have stopped, paused or delayed the majority of their clinical trials and studies, affecting around 126,000 patients who should be taking part but now cannot. Medical research charities may not benefit from the charity support package announced by the Chancellor because they do not provide commissioned frontline services. These charities urgently require emergency bridge funding so that they can maintain their contribution not only to the Covid-19 frontline, but also to the many other critical ongoing and planned research projects, in which this country often leads the world.
My second point concerns rare disease charities, which provide vital and often unique support to the more than 3 million people in the UK who will suffer from rare diseases during their lives. These charities are often small, and they have seen income fall as the pandemic continues. They need urgent help but are concerned that they will not qualify under the guidelines announced for the charity support package. The Government are finalising the details of support packages for charities; I urge them to take into account the needs of medical research charities, the small, rare-disease charities and the millions who depend on them, when deciding who gets what support.
My Lords, I declare my interests as vice-president of Hospice UK and Marie Curie.
Across the UK, hospices must raise £1.5 billion every year to provide essential expert and compassionate care. Over £1 billion comes from the public, through charity shops and fundraising. As the pandemic unfolded, Hospice UK estimated that a plummeting income to hospices of £70 million every month risked failing hospice services, which would throw enormous pressure on the NHS.
I thank the Chancellor for his swift action, announcing on 8 April an unprecedented £200 million package of support for hospices in England, with consequential funding in Scotland, Wales and Northern Ireland, as part of the Government’s immediate support to charities. This ensured that hospices remain an integral part of care services, as this pandemic has become a palliative care emergency. Hospices share innovations weekly through ECHO Zoom webinars that stimulate creativity and problem solving; contribute to major workstreams caring for those dying, whether of Covid-19 or non-Covid-19 causes; develop sensitive care planning that is respectful of human rights and individual needs; and integrate with bereavement services, particularly recognising the needs of bereaved children.
Looking ahead, charities must adapt, as the noble Lord, Lord Addington, said in his important opening remarks, with new models of charitable and statutory services working more closely together than ever before. The change is seismic. Hospice and palliative care commitment to supporting people when in extremis remains stronger than ever.
My Lords, at the very time when we need every charity in the country to be mobilised and deployed, many are teetering on a cliff edge. I have been very struck by the range of charities that have sent me briefing notes: St John Ambulance, Barnardo’s, the MS Society, the Motor Neurone Disease Association, Macmillan Cancer Support, the Scouts, Refugee, Cancer Research UK and the Rainbow Trust, to name but a few. I am sure that other noble Lords have heard from many others.
Over the years, as the Government have, rightly, raised standards in safeguarding, health and safety, and training, charities have had to employ people to meet those requirements. Now, as income from fundraising activities and charity shops, as well as rental income, has dried up, they are furloughing the very staff who are needed to oversee volunteers.
Of course, many charities are themselves major employers and, as such, are part of the drivers of economic recovery. To give a small example from my own neck of the woods, our Anglican cathedrals employ over 3,000 people—some full time, some part time. As well as providing places of worship and support, they are also art venues and a major contributor to the tourist industry.
We are all passionate about trying to allow charities to function fully again and to raise their funds; meanwhile, they need help, and they need it rapidly. Has the Treasury considered a simple mechanism based on raising the amount of gift aid that charities can claim back? It is an excellent form of match-funding and would be relatively simple to administer. I hope that the Treasury will work sympathetically with all the ideas that we can come up with.
I congratulate the noble Lord, Lord Addington, on obtaining this important debate. I draw the House’s attention to my entry in the Register of Members’ Interests in relation to my role as a trustee for various charities.
We have already heard, and will hear a lot more, about the very real hardships experienced by the whole range of charities. However, in the short time allotted for my contribution, I want to highlight the plight of one charity—perhaps one that does not immediately come to mind. I refer to the Zoological Society of London.
ZSL encompasses two zoos, science teaching and research, as well as being a national and global conservation NGO. Its turnover is too high for the coronavirus loan scheme or for the one aimed at large companies—the corporate financing facility. ZSL must keep its animals cared for, which means that zookeepers, site staff and animal health teams keep working. Therefore, the vast majority of the staff are ineligible for the furlough scheme, which requires staff to do no work at all.
ZSL is a national institution doing outstanding work on managing zoonotic disease such as Covid-19, as well as tackling serious conservation issues such as the illegal wildlife trade, which likely caused Covid to spread to people. All that is underpinned by ZSL’s zoo income, which currently is zero.
There is a real fear that ZSL will not survive if laden with debt. When the zoos are running with a full complement of visitors, the surplus enables the conservation and science to happen. Sadly, grants and philanthropy do not cover the costs of conservation and science. In the current environment, the zoos are shut, producing no income. They run at a loss during the winter and generate most surplus during the Easter break, and it is unclear when they will reopen. Given that 40% of visitors to London Zoo are foreign, it is extremely uncertain what levels of income ZSL will return to, even following reopening.
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I will give some examples from areas that I know about. The minute that the schools were shut down, the British Dyslexia Association found itself with a huge number of people asking, “How do I support my child at home?” It has had to host online seminars, with huge numbers of people taking part and huge demand for more to come in. This is occurring at a time when the organisation’s income is falling. We could go through many different examples of how and why this kind of thing is occurring. But it is fundamental to charitable activity that you get people together— for example, at a dinner or a sponsored run or walk— and they get other people to give them money. You undertake the thing as a mass group and you hand over the money—great. You also stimulate people to set up standing orders and so on at that time. You make sure they are aware of the projects. You build up publicity to ensure that charitable foundations and suchlike, which are often formed by businesses, pump in a certain amount of money, and that donations will come in from wills drawn up for the end of life when houses are sold and so on. All these activities are either banned by the lockdown or have become much less profitable.
Many charities that have their portfolios invested in the general economy suddenly discover that their investments are reducing in value or dividends are not being paid out. This is doubly true for the charitable foundations. All the money going into these groups to support their work is disappearing or being reduced. This means that we will have a shortfall. Many charities work on the assumption that the money they are raising today will be spent in a certain amount of time. They will have to go to reserves. The whole sector is under enormous pressure—and added to the financial pressures are the individual and unforeseen demands of the crisis. This is all coming together, making it impossible for us to see where we are supposed to go. The longer the lockdown goes on, the worse this situation will get. Charities cannot really plan for their own future; this is beyond their capacity. We must look to the Government to help.
What is in it for government? If people are successfully educated—to go back to the dyslexia charity which I have talked to your Lordships’ House about often—you make sure that people are identified and supported through their education. In the long term, success in education is probably the biggest determinant of success in life: you will be reasonably successful, and you will be able to pay your bills and go forward. If things break down here, you are making sure that oncosts and pressures will affect you later. That is just one example.
Britain’s status overseas is raised by the actions of our charities to help nations that have a less well developed economy than us or have other problems. These charities are under particular pressure. Other charitable operations are taking place now that would not normally be, and the economy is shrinking, so there is going to be a problem, and a point at which we will have to say who gets the money. For the general public, it will probably be the problem in front of them at the time, not something in the future. All charities will be pressurised; they will find themselves curtailed and squeezed at virtually every level. We have to think of better ways of helping and supporting them, to make sure that the functions they have taken on are still there later.
I have some more examples. I have dealt with many autism charities: for instance, I have recently been talking to Autism Hampshire, a small charity that offers supported living and runs a series of care homes for people with autism. If it is not getting a reserve of money in, can it run these homes in future? Will that group be able to function properly? We must always keep our eyes on what happens next; if we do not, getting through this will not bring about results that are beneficial to our society. We need something which means that we can go back to a decent level of civil existence. If we come out of lockdown through a series of staged activities, as seems to be happening in the rest of Europe, we must make sure that we interact with charities as they go through those stages.
Government help is available in various forms, but has the sector been informed about it? Are the Government saying, in sector-by-sector blocks: “Here is the information you need in an easily accessible form”? If they are not, much of it will be wasted.
I have seen this in the past when working with people: “Oh yes, the information’s there. Click once here, go through that site, click twice, then ask for the booklet, and then it comes back to you”. Most people will have given up by that point; in particular, if amateurs are running an organisation, they are not going to follow through to find out what is going on. I have spoken to theatre groups that are running large theatres as charities, with youth wings and professional performers—the whole panoply. If they are under pressure, they have to know where the help is, particularly if staff have been furloughed or lost. You have got to make it as simple as possible. In this situation, the Government have to make the help available as easily available as possible. I hope that when the Minister replies for the Government, she will be able to point out where this has been done, or where it is going to be made simpler still. If the sector does not know where the help is, it might as well not be there.
If this situation continues and there is continued pressure, everything will get a little bit worse and the intervention will have to be more aggressive. We have to make sure that everybody knows there is assistance, or the state will have to start to take over some of these activities. If the state has to do that, there will be greater pressure on budgets all round. Will the Government please make an undertaking that they will assist those groups which take on the work that they have otherwise done? To put it bluntly, if you want more vulnerable people in society, you make sure that they cannot go to a dance group for the over-60s in a local church hall or school. When we go through this process, are we going to make sure that everyone knows when the school will be available and what appropriate groups can go in and act? That is a fundamental part of what is going on.
Such levels of communication will be complicated, but they will be needed. At the moment, the message is “Stay at home”. When we want people to go out, to be active and engaged and do positive things for society and for themselves, we will have to know that that is the message.
As I bring my arguments to a close, I call upon the Government to make sure that information about the infrastructure to help is communicated and emphasised at every point, and made as simple as possible. Without that, we will not be able to access the good will which is undoubtedly there, in most of these sectors, to help us come out of this properly. The organisation and financial structures of charities now will dictate what they can do when this process ends. The Government must take this seriously and address it in future planning. If they do not, I am afraid that much of the good work may be spoiled, and our society will be much weaker and more vulnerable in the future. I thank noble Lords for listening.
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.]
Unlike the Royal Botanic Gardens at Kew and the Natural History Museum, ZSL is a global impact science and conservation organisation, running its public-facing zoo with no core government support. I urge the Government to give careful thought to what support they can give to preserve this national institution.