HM Treasury Announces Emergency Support Package for Charities

Last week, the UK Government agreed to make available additional funding to support frontline and small charities affected by the coronavirus outbreak.

The headline figure announced by the Treasury amounts to some £750m. This will be comprised of:

  • £360m to be allocated directly by Government departments to charities providing key services and supporting vulnerable people during the crisis; and
  • £370m to be allocated to small and medium-sized charities via the National Lottery Community Fund.

The balance of money will be made up by matching public donations to the BBC’s Big Night In charity appeal. The above funding streams constitute direct grant funding made available to the charitable sector and will be subject to the relevant terms and conditions of the specific grantor.

Who is eligible?

Central Government

This £360m tranche of funding will be released at the discretion of Government departments; the Treasury is currently allocating funding between them. HM Treasury has specifically listed the types of charitable body that are likely to receive priority funding. These are those that are providing direct support for essential social services (e.g. hospices, St John’s Ambulance) and to charitable bodies supporting the vulnerable affected by the crisis, including victims and children’s charities.

The principal recipients are likely to be registered charities directly engaged in health and social infrastructure activities, although there is no express prohibition on CIOs or other charitable organisations from receiving funding.

It is expected that established, larger, grant recipients, already in engagement with their sponsor Government departments, will receive the bulk of this funding. It is understood that the Government is in the process of identifying eligible recipients and soliciting views from the sector.

National Lottery

This £370m tranche of funding will, in England, be under the control of the National Lottery Community Fund.  It will act as the grant administrator and deal with grant applications and disbursement. Effectively, the Community Fund will be ‘retooled’  for the next 6 months as a body for the distribution of this grant funding in priority to its existing projects.

The Community Fund has indicated that it will focus on existing grant holders and recipients with annual incomes of less than £1 million, but more particularly, that it will prioritise organisations supporting people and communities at high risk from Covid-19 and/or challenges as a direct result of COVID-19 or organisations that are more likely to face increased demand.

The Community Fund is not restricted to funding registered charities and can support other bodies, including but not limited to, trading companies within a charitable corporate group, CICs and CIOs. As the name suggests its general remit is to provide funding to ‘community’ organisations, broadly defined who engage with their locale and give local activity and support.

Applications for grant funding can be made via the National Lottery Community Fund’s website.

How may this help Registered Providers in their missions?

Whilst the majority of the grant funding will be claimed by established charities and programme partners of the Department of Health and the DWP, there is support for charities providing essential services.

Registered Providers are playing a key role in supporting their residents and other stakeholders through this crisis. They are embedded in the communities in which they operate and provide a vital role in supporting the vulnerable. Many RPs have discrete, community-orientated, charities that could be recipients of this grant funding.

It is open to charitable RPs, those that are smaller and more specialised (or which have locally focused entities), to seek charitable grants to support the work their communities benefit from.

It is also open to RPs to identify and support relevant stakeholders and partners (including the charities they work with in their respective communities) in bidding for the grant.

And the Wider Charitable Sector?

The Chancellor of the Exchequer has bluntly stated that the Government cannot be expected to support the entire charitable sector during the period of crisis.

Indeed, there have been significant complaints within the sector that the Government’s response has been piecemeal and failed to recognise the broad social and commercial activities undertaken by charitable bodies. Notably, the vast majority of charities are prevented from accessing the Small Business Grant Fund and the Coronavirus Business Interruption Loan Scheme (CBILS) due to the trading requirements set out in the funding criteria.

However, the broad objectives set out in the emergency funding package may benefit a broad range of charitable bodies, provided they have a clear purpose in using the funds and are able to act quickly in accessing it.

What Other Support may be available for Charitable Bodies?

The Government has put in place a range of other support measures.

Some of those, not specifically targeted at charities, may offer help to charities. Below are a few key schemes and highlights:

Covid-19 Corporate Financing Facility

Under the new Covid-19 Corporate Financing Facility, the Bank of England will buy short term debt from larger entities with the capacity to issue commercial paper debts. All non-financial companies, including registered charities and RPs that meet the criteria set out on the Bank of England’s website are eligible.

As set out in the criteria, this form of support will generally be for entities that make a material contribution to the UK economy, and specific criteria now exists for RPs (including a requirement for V1 status).

Big Society Capital

Big Society Capital, the social investment body, is making some £100m available to charitable bodies (expressly including Community Benefit Societies) and social enterprises as part of a loans package to the sector.

In particular, Big Society Capital is seeding:

  • The Resilience & Recovery Loan Fund. This may provide 12m interest free loans to charitable bodies with a turnover of less than £45m. As this piggybacks on the Government’s CBILS scheme, there is some discussion how and whether the borrower needs to show evidence of trading activity, and it is recommended that the applicant engages with Big Society Capital as soon as possible.
  • £50 million to address emerging funding needs among social enterprises and charities, either through the Resilience and Recovery Loan Fund or alternative funding vehicles as appropriate.

It is expected that further details of these funding steams will come online in the next few weeks, with loans being made by early May 2020. It is however recommended that potential applicants make contact as early as possible.

National Lottery

The Community Fund will also be using its existing £300m grant funding to bolster charitable bodies assisting in the response to Covid-19. As summarised above, this may benefit RPs and their charitable partners to the extent that they operate in this area.

Additionally, the National Lottery Heritage Fund will be releasing £50m in additional emergency funding for heritage charities in severe financial crisis as a consequence of the Covid-19 crisis.

Other Funding

NCVO has provided a helpful link to many of the (smaller) national schemes available to charities in need of funding and support, including links to Arts Council and Sports England funding streams.

Furlough Scheme

Under the COVID-19 job retention scheme any employer can contact HMRC for a grant to cover the wages of their employees. These grants will cover 80% of the salaries of these retained workers, up to £2,500 per month and employers can top payments up if they wish to. The scheme has recently been extended to continue until 30 June 2020.

Charitable bodies, including RPs, are eligible for HMRC grants under the Furlough Scheme and we have drafted a helpful advice notice.

Further Information

For further information on the above measures and on the assistance that might be available to you, please contact Jonathan Jarvis or David Emery.

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