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7 May 2020

£750m government emergency support not enough to prevent charity closures

Seven in every ten UK charities expect to cease operations by the end of 2020, according to the Digital Culture, Media and Sport Committee. 

By Samir Jeraj

A parliamentary committee has criticised government failures in supporting UK charities hit by Covid-19, saying that rising demand for services has led to a collapse in income means.

The Covid-19 crisis and charities report published by the Digital Culture, Media and Sport (DCMS) Committee also criticised the lack of transparency in how the current pot of £750m, which Chancellor Rishi Sunak pledged in support for front-line charities, is being distributed. The Secretary of State for DCMS, Oliver Dowden, was also singled out for criticism for being unable to provide sufficient information about who could get the support two weeks after it was announced.

Chair of the DCMS Committee, Julian Knight MP, said charities did not believe they had “some sort of right to survive”, but people had “a right to the services they provide”. He added: “We warned the chancellor that charities told us they faced a £4bn gap in money coming in, with some smaller charities facing insolvency within weeks without immediate emergency support.”

The Nation Council for Voluntary Organisations have estimated charities will lose £4bn in projected income from March to July, as social distancing hits traditional fundraising activities such as events and retail trading. A survey by the Directory for Social Change found that, without financial support, seven in ten UK charities expected to close before the end of the year.

The report urges the government to establish a “stabilisation fund” to keep charities functioning and supporting people who depend on them.

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