How much government funding has the charity sector really received?

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