Charities could go to the wall without urgent Government intervention, Rishi Sunak has been told, with the sector expected to suffer a £4bn hit due to the coronavirus outbreak.
Whilst the Treasury has announced an unprecedented package of support for business, the Chancellor has been told that thousands of charities are “teetering on the brink” and could cease to exist.
In a letter published in Friday’s Daily Telegraph, the former Tory leader Sir Iain Duncan Smith and General Lord Dannatt, the chairman of the National Emergencies Trust, warn that charities’ income is “collapsing”.
Despite charities playing a vital role in the response to the pandemic, helping to support the NHS, care homes and hospices across the country, they point out that they “can’t help tackle coronavirus…if they no longer exist”.
Writing separately for telegraph.co.uk, the former Conservative minister Rob Wilson adds that without action “literally thousands of charities could be gone within a matter of weeks.”
The letter is also signed by three former charity ministers, including ex-Labour leader Ed Miliband, and the Rt Rvd Stephen Cottrell, the Bishop of Chelmsford.
With charity shops forced to close across the country and hundreds of fundraising events cancelled due to the Government shutdown, they add that trading income has nosedived.
The situation has been compounded by the global plunge in shares and stock, which has “tanked” investments and left organisations with no choice but to “run big deficits” to keep going.
The Telegraph has been told that one major trust has lost more than £100 million in a week due to the pandemic.
According to the National Council for Voluntary Organisations, UK charities are now forecast to lose out on at least £4.3 billion in the next 12 weeks.
However, unlike other businesses, many charities are unable to access the business interruption loans unless they generate half of their income from trading.
Business rate relief, whilst applicable to shops, does not apply to other premises such as children’s centres.
Calling for urgent intervention, the signatories write: “ Much of the crisis support doesn’t help charities. Supporting wages for workers who can’t work now won’t help charity trustees having to run big deficits and keep going.
“Many are having to take decisions now, about redundancies and closures as the situation is financially so grave.
“The Chancellor has said the government is working on support for charities and, of course, it needs to be set up in the right way. It can’t come soon enough.
“Charities can’t help tackle coronavirus, or help us rebuild, if they no longer exist.”