How much government funding has the charity sector really received?

By Tom Collinge 16 September 2020 5 minute read

Recently, the National Audit Office (NAO) has released a Covid-19 cost tracker which uses government data to ‘provide estimates of the cost of measures announced in response to the coronavirus pandemic and how much the government has spent on these measures so far.’

There is a lot that is of interest in there, especially to those of us who have been following the government spending within the charitable sector in response to the crisis.

We have worked to try and understand the structure and actual final value of the government’s £750m fund for charities tackling the crisis and this resource helps us to do that further and to understand how things have changed since the fund was initially announced.

Less than half of the fund has been spent

The most asked question since we did our analysis of the £750m package was ‘how much has actually reached charities?’ We weren’t able to answer that, but the NAO report includes information on what, of the estimated total costs of the spending lines, has been spent. The report is not consistent on the time it covers, with individual budget lines noting the date the last spending total was derived from. As such, it only gives an indication of what has been given out, rather than a cast iron figure. Still, it is the most information we have and the results are interesting.

So far, according to this report, £325m has been spent. This is under half of the £750m set out originally. The report also reveals (as further discussed below) that the overall size of the pot is estimated to have increased to up to £863m. Taking this into account, what has been spent so far represents about 40% of this new, higher, estimate. We should note, the proportion of spent funding we can derive from the report is probably lower than the reality because there is no information in the NAO report on what has so far been spent by the Scottish and Welsh governments from the £60m they were allocated as part of the £750m.

Looking through the report, we can see that of the many different funds which make up the support package, there are some notable differences in the proportion of the funds that have been spent so far. Looking at the largest funds, of the ‘up to’ £200m allocated to hospices, £155m had been spent by 30.06.2020—77.6% of the total. We can also see that of the £200m allocated to the Coronavirus Community Support Fund, run by The National Lottery Community Fund, £58m has been spent, representing 29%.

The only funds where the total spend now matches the estimated cost (according to the NAO) are the smaller ones. The £6m homelessness fund, £6m armed forces impact programme and £20m for domestic abuse and sexual violence community-based services all appear, from the report, to be fully dispensed.

There are several funds where it seems that no money has thus far been spent, or the data is missing. Of the funds where we can see that at least some money has been given out, the one with the lowest percentage spent is the zoos fund—at 2%, with £2m given out. This is in large part due to the massive increase in the potential value of the fund (up £86m taking it to £100m in total). However, the £2m spent so far is still only 14% of the original £14m value of the fund. It is slightly unclear to us on the outside why the value of the fund needed to be increased by so much, when the amount given out is so far relatively small.

Increasing costs and confusion about purpose

Our work showed the total fund was always going to be slightly larger than the £750m figure that was announced. The NAO report reflects this, with an initial estimate of the value of the fund at about £761m when spending for Scotland and Wales, which the NAO do not include, is taken into account.

But the NAO has also provided new cost estimates of all the sub funds which make up the £750m, (excluding the £60m allocated to the Scottish and Welsh governments). Adding up these new estimates (and adding the Scottish and Welsh £60m back in) we arrive at a new total value for the pot of £863m.

Part of this increase comes from match funding campaigns, such as the Big Night In which beat expectations, but the most significant part of it is an £86m increase in the potential cost of the zoo support fund, which is being beefed up from 14m to ‘up to’ £100m.

Our charity redundancies monitor does indicate that zoos are struggling, but it is hard to determine from the information we have if an additional £86m is appropriate. The Born Free Foundation suggests that there are over 300 zoos in the UK, but not all of these will be charities. A quick run of the term ‘zoo’ through the Charity Commission register suggests there are 125 zoos currently registered as charities. As this funding is supposed to be restricted to charities, they are potentially in line for almost £1m each.

For me, this new potential funding also reopens the question of what the government funding is designed to do. While there was discussion of a ‘bail out’ of the charity sector, the government said:

The funding is aimed at supporting those who need to continue providing their services as part of the national coronavirus response.

In other words, the funding was not a general bail out, rather targeted funding to help certain charities fight the impact of the virus. However, the scale of the new potential funding for zoos does suggest, to a lay person, that the government is essentially bailing that sector out.

We currently do not know the reasoning behind this increase, and how much of the ‘up to’ £100m the government actually plans to spend. It would be good to get some clarification on this, as it currently invites unflattering comparisons to other important causes which have received less funds, such as domestic violence.

Government spending on charities potentially reaches £2.9bn

Our analysis so far has focused on the £750m fund for charities but we are aware that the government has been spending a lot elsewhere and that some of that funding has likely gone to charities. While not very granular, the NAO report gives us some useful information that allows us to build out this picture. Below, we will now run through the information it contains about direct funding to charities outside of the £750m and funding likely to reach or include charities.




National early years voluntary and community sector: £1m

It is quite difficult to find out anything about this pot. We do not think it is part of the £750m but, as the funds often have slightly different names between the government sources we have used and the NAO report, it is not impossible. This fund is described as going to national early years voluntary and community sector (VCS) organisations, including National Children’s Bureau, Early Years Alliance and Pacey, and it will be targeted at improving outcomes for children most at risk of falling behind by the age of five and will increase the support for young children with special education needs.

Grant-in-aid for the British council: £26m

The notes on the NAO document describe this as follows: ‘The Foreign & Commonwealth Office (FCO) provided the British Council with £26 million additional non-ODA (Official Development Assistance) grant-in-aid funding to fully fund their non-ODA grant network in 2019-20. In addition, the FCO made a £60 million revolving credit facility available to the British Council in 2020-21 to help them manage the impacts of Covid-19. Future funding will be determined as part of the Spending Review process.’

Support for the Disasters Emergency Committee (DEC): £10m

This is likely to be the match funding of DEC’s coronavirus emergency appeal, as described in this article, which states: ‘The appeal aims to provide food, clean water and medical supplies to some of the most vulnerable areas in the world, where the already precarious living conditions are worsening dramatically because of the Covid-19 pandemic.’

Funding for the new International Red Cross and Red Crescent Movement appeals: £50m. Funding for international non-governmental organisations: £20m

These two spending lines are part of £200m in funding announced by the Department for International Development. The £20m component is for international organisations based in the UK. The remainder of the £200m goes to ‘support United Nations’ agencies.’

Dormant assets funding: £150m

This funding aims to ‘support urgent work to tackle youth unemployment, expand access to emergency loans for civil society organisations and help improve the availability of fair, affordable credit to people in vulnerable circumstances.’ It is being distributed to charities and social enterprises. This is listed by the NAO as of no cost to the government and the value of the funding is derived from other sources.

Support for research universities: £280m

Almost all universities in the UK are charities. Details of this package can be found here.

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Likely to go, at least in part, to charities—£1.6bn

This section covers funding that may not have been directly awarded to charities but is likely to be used to commission charities’ services, or is aimed at a ‘mixed’ sector (which includes charities and private providers e.g. arts and education). There are judgements and assumptions made here and I set them out under the headings. They are open to challenge, get in touch if you think there is an error and I will happily revise this analysis.

There are many funds in this NAO report that pertain to tackling the virus overseas. They may involve charities in particular countries or international NGOs. Without a sophisticated understanding of how this works in each context I have chosen to omit them.

Evaluation: £5m

The report identifies £5m for ‘mitigating fraud and error while supporting grants and debt management,’ and attributes it to the Cabinet Office. It states that £2m has been spent so far.

Specialist help for vulnerable people in emergency accommodation: £16m

At the time of writing, I have not been able to find anything about this other than its name. I have included it here because specialist help for vulnerable people is often provided by charities, even if commissioned through a local authority.

Funding boost for remote victim services (sexual violence helplines): <£1m

I have included this because many sexual violence helplines are run by charities. See a list here.

Cultural Recovery Fund: £1.1bn. Government backing of heritage places: £25m

Arts and heritage assets and organisations are owned and run by a mixture of charities, local authorities and private organisations.

Funding for rough sleepers and the Next Steps Accommodation Programme: £538m

Support and services for rough sleepers are often provided by charities.

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So, this NAO report suggests the charity sector is lined up to receive £1.3bn in direct awards and is potentially able to access a further £1.6bn. This would make the government’s potential funding for the sector in the crisis up to £2.9bn.

In reality, charities (especially front-line charities) are extremely unlikely to be able to access anything like this. The biggest pots which make up this additional funding have either gone to universities, culture (which will rightly go to many business and local authorities as well as charities) and to support rough sleepers (which will go through local authorities to hotels, with charities hopefully involved at some point). Furthermore, increases in restricted contracting or grant income are not as useful to charities as the unrestricted funding they have lost through retail and event fundraising.

Six months into the crisis, we are now calling on the government to consider if the funding it is offering to the sector, as we see it here, is doing what it wants it to do to tackle the health, economic and social impacts of the virus. A joined up and strategic approach that uses civil society as a partner across different government departments will likely have more impact than the slightly ad-hoc series of measures that we have outlined above.

The National Audit Office's new Covid-19 cost tracker has been analysed by @NPCthinks. The report suggests charities may potentially receive up to £2.9bn Click To Tweet