Virus-hit charities 'need substantial support'

Charities are expecting to lose around a third of their income over the next three months due to the coronavirus outbreak, MPs have been told.

Karl Wilding, chief executive of the National Council for Voluntary Organisations, said his group has been “inundated with calls for help”.

MPs heard voluntary organisations needed “substantial” government support to shore up their finances.

PM Boris Johnson has promised a “package of measures” for the sector.

The Treasury has also said charities will be able to defer VAT bills for three months, and many charity shops will qualify for a year-long holiday on business rates.

Charities can also apply for the government scheme that grants firms cash to pay 80% of the wages of staff furloughed on temporary leave.

Mr Wilding told the Digital, Culture, Media and Sport Committee he estimated charities would lose around £4bn of a predicted £12.5bn income in the next financial quarter due to a loss of trading income.

He said only a quarter of charities had reserves that could see them through the next three months, while social distancing rules aimed at stopping the spread of the virus had made traditional fundraising events such as marathons impossible.

The crisis faced by charities now is more serious than after the 2008 financial crisis, when they got a £40m bailout, he added – noting that the sector today is bigger and more involved in delivering public services.

Mr Wilding said it was welcome charities would be eligible for the government furlough scheme, but it would only be an option for up to a third of charities.

Putting staff on leave, he told MPs, was the “last thing” that charities involved in the fight against the virus would be able to do, due to increased demand.

“Mothballing staff when demand is increasing is the opposition of what you need to do – we need to mobilise them,” he added.

Martin Houghton-Brown, chief executive of St John Ambulance, told the committee the Treasury would need to “step up” and help charities responding to the virus.

He said the charity, which is providing volunteers for the Nightingale hospitals dealing with Covid-19 patients, needed an extra £450,000 a week to continue going throughout the crisis.

He added that despite some generous private donations, as things stand it will need to borrow heavily against its assets to keep going beyond August.

He also warned that it would prove “impossible” to resume Premier League football games without the first aid volunteers it provides at matches.

Last week 100 MPs and peers from seven different political parties called on the government to provide extra support for charities.

Labour MP Stephen Doughty, who wrote the letter, called for emergency help and backed the idea of a "stabilisation fund” for voluntary organisations.

The Treasury has said it recognises some charities are facing difficult decisions and do not want to stop services when they are most needed.

As well as the support on business rates and VAT, charities which raise at least half their income from trading will be eligible to apply for government loans from a £330bn scheme, the department has said.