Other witnesses included Sarah Healey, Permanent Secretary, Department for Digital, Culture, Media and Sport and John Rose, Interim Chief Executive, National Lottery Fund.
The committee discussed the support that the Government provided to charities during the covid-19 pandemic’s early stages.
This being a £750 million package in April 2020, which was aimed at organisations, charities, voluntary groups and social enterprises that were providing vital services to the most vulnerable
people. They looked at how that went, what changes took place to that fund and now that we have reached the end of that financial year, what tracking is being done of how that money has been spent, and whether any money may have been returned to the Treasury.
The Department for Digital, Culture, Media and Sport was responsible for distributing and overseeing £513 million of that £750 million package.
The session focused mainly on that and the general health of the sector.
Sarah mentioned that there is some evidence that
“fundraising has actually probably increased; charities have, overall, raised more funds in the course of the last year than they did in the previous year.”
John informed the committee that
“Since the beginning of the lockdown, we have been continuing to support organisations with national lottery funding (TNL).”
What this funding did was to give TNL a boost of a further £188 million of Government funding to support emergency packages, which enabled community organisations and charities to get that important support directly to beneficiaries.”
Helen explained about the financial challenges in the sector. She stated
“We are not seeing significant numbers of charities coming off the register as a result of closing, although I would say that it is quite likely that that would be delayed as we are the last part of that process, but we are seeing instances of worsening financial resilience in the sector. For instance, the number of charities with incomes over £500,000 that have negative or no free reserves has increased in the last year. Back in April last year, it was 9%. In March this year, it is 28%. We have also seen an increase in the reporting of matters of material significance from auditors by about 25%. The numbers are not particularly high, but the increase is statistically quite significant, and that means that there are charities that are either experiencing financial difficulties or are at risk of insolvency. It is too early to say in terms of numbers closing, but we are seeing indicators of that financial resilience worsening.”
The committee will be producing a report in the next month or so on their findings. In the meantime you can access a transcript of the session here https://committees.parliament.uk/oralevidence/2018/default/