About the CFDG
This page has the latest news and advice on the recession (last updated 08.10.09).
Government support
- Government Action Plan for the Third Sector, including workshops on the Plan
- General Government support
- Financial Services Compensation Scheme (FSCS)
Support for CFDG members
- Helplines
- Publications
- Events
- Ongoing lobbying
Specific issues
- Fraud
- Pensions
- Going concern
- Employment
Recession advice and news
- A to Z of recession help
- Recession news
If you have any suggestions of ways that we can help you during the recession, please let our Policy Team know. For confidential discussion any of the issues around the recession please join our Online Discussion Group.
Government support
Government Action Plan for the Third Sector
The Government have published their Action Plan for the Third Sector, 'Real Help for Communities: volunteers, charities and social enterprises', on 9th February 2009. CFDG welcomed the Action Plan, which starts to address the sector's needs in these tough economic conditions. We will continue to work with Government to secure the further support which our members believe is necessary.
The Office of the Third Sector (OTS)is running workshops across England and Wales to help third sector organisations get the most out of the Government's support. In particular there will be workshops for those thinking of merger or collaboration. More information and registration: www.coievents.co.uk/realhelpforcommunities/. The presentations from those workshops are now available from the OTS website, and include the Modernisation Fund, the Targeted Support Fund, a Communitybuilders presentation and also one from the Charity Commission.
The headline committments were as follows:
Commissioning: A £15.5 million Community Resilience Fund will provide grant funding to small and medium providers in our most deprived communities, in areas where demand in increasing. Specifically: employment, legal and financial services, mental health support and support through family breakdown. Typically the grants, which will be available from April 2009, will be targeted at organisations with an income of between £30,000 and £100,000. The engagement of commissioners with small and medium providers will be strengthened through an extension to the National Programme for Third Sector Commissioning. This year will also see a refereshed Compact, and a Joint Compact Action Plan.
Modernisation: A £16.5 million modernisation fund to help with the cost of mergers, partnerships and moves to more efficient sharing of back office functions for at least 3000 third sector organisations. The Modernisation Fund website.
Volunteering: Up to £10 million investment in a volunteer brokerage scheme for unemployed people with create over 40,000 opportunities for people to learn new skills and give back to communities through volunteering.
Prompt Payment: A national campaign to encourage public bodies to pay all invoices within 10 days, which will improve cash flow for small organisations.
School for Social Entrepreneurs: There will be £0.5m of investment in the School for Social Enterpreneurs, from April 2009.
Gift Aid: They are researching Gift Aid for higher-rate tax payers, and should be reporting on their research in Autumn 2009.
Task Force: The Government are convening a three-month task force, where the private and third sectors will work together, focusing on sharing skills and looking at corporate support for the Third Sector.
Business Support: The Government have also reaffirmed that their support for businesses is available to the Third Sector, including the Enterprise Finance Guarantee, the Working Capital Scheme and the Capital for Enterprise Fund. For more information on these, please see Real Help for Finance.
Pensions: The Office of the Third Sector, the Pensions Regulator and the Charity Commission will work to target information about pensions to third sector organisations, including information on the available flexibility around recovery plans. The Department of Work and Pensions (DWP) is engaged on work around defined benefit pension schemes and their impact on mergers and restructuring. We are expecting a consultation from DWP on this subject during Spring 2009.
Slides from a presentation of 'Real Help for Communities' are now available here. CFDG's proposals for the Government Action Plan can be found here. At the end of 2008 NCVO and the Minister for the Third Sector, Kevin Brennan, hosted a summit to consider the effects of the recession on the Third Sector. A summary of that conference can be found here.
General Government support
The Government have confirmed that their £20bn package of recession support for small businesses will also be available to the third sector. The package comprises of three elements:
Through the Enterprise Finance Guarantee (EFG) the Government will guarantee 75% of a loan, with banks covering the remaining 25%. The EFG is open to organisations with an annual turnover of up to £25m.
Under the Working Capital Scheme (WCS), banks will submit a portfolio of loans to businesses (lending to businesses with turnover up to £500m) to the Department of Business, Enterprise and Regulatory Reform (BERR). BERR will guarantee up to 50 per cent of the value of the portfolio, securing up to £20bn of bank lending.
The Capital for Enterprise Fund (CEF) builds on the announcement in the PBR of a £50m fund to convert businesses' debt into equity. The new announcement means that the Fund will provide £75m of equity, made up of £50m from Government funds and £25m from high street banks. The CEF is open to organisations with a turnover of up to 50m Euros.
For more information: www.businesslink.gov.uk/realhelp/finance
Business Payment Support Service: in November 2008 HMRC introduced a helpline to provide specific help where you are worried about being able to pay tax, National Insurance or VAT. It is best to contact them sooner rather than later – you can make arrangements to pay the amounts due over an extended period of time, although you will be charged interest. HMRC Business Payment Support Line: 0845 302 1435.
Financial Services Compensation Scheme (FSCS)
When the Icelandic banking crisis hit in 2008 CFDG lobbying hard for charities to be eligable for the FSCS (see information on the Icelandic Banking Crisis on the Current Issues page).
The Financial Services Authority (FSA) have launched a consultation on the reform of the Financial Services Compensation Scheme (FSCS), information on whcih can be found on the Consultations page.
Support for members
Helplines
The Charities Aid Foundation (CAF) have launched a free, confidential helpline for charities worried about their financial viability. CAF advisors will be giving advice, and referring charities to other sector umbrella bodies, including CFDG, where appropriate. The helpline number is 0800 980 2000.
CFDG members are reminded that we run a number of helplines for members: accounts, investment, IT and legal (you will need to log on to access the helpline numbers).
Managing in a Downturn: an update of expectations six months on, is available to download.
Our report, Managing in a Downturn, is available to download, and the presentations from the launch will also soon be available.
Howarth Clark Whitehall have prepared a detailed guide on 'Charities and Insolvency', which is available on the document library.
Our popular Made Simple guides will give you a clear understanding of the basics on all major financial areas. These are also available on the document library. Simply log on, and search for publications entitled 'made simple' in the document library.
CFDG's latest Risk Survey will give you a good idea of the sector's appetite for risk at the time of publication in late 2008. The presentations from the Risk Conference 2008: Staying Alive, are also available, as are the presentations from all conferences and members' meetings.
Our CEO, Keith Hickey, wrote an article entitled, "What did you do in the recession" in June last year, which provides lots of useful advice on what to keep on top of during difficult times.
Events
CFDG's 2009 Annual Conference is entitled 'Managing in a Recession', and will be taking the current economic climate as its theme.
Ongoing lobbying
The sector umbrella bodies have come together to pressure the Government into acting on the key areas of Gift Aid and VAT, in light of the current economic climate. A letter was sent to Stephen Timms, Financial Secretary to the Treasury, and the heads of CFDG, NCVO, Acevo and CAF subsquently met with the minister. Details of the meeting can be found in the joint press release that was issued after the meeting.
Specific issues
Fraud
Fraud becomes a particular concern in any downturn. The Charity Commission's publication CC8: Internal Financial Controls for Charities, should be a first port of call for good practise and fraud prevention. You may also want to try The Fraud Advisory Panel, who have recently released a report - available from the homepage of their website - entitled Fraud in the Charitable Sector. Accountancy Age also recently published an interesting article, Fraud: the occupational hazards.
If anyone should suffer a fraud, please do let our Policy Team know. We will treat the information in complete confidence, but it is very useful for us know know what fraudsters are trying, in order to help other charities to avoid such attacks.
Pensions
CFDG are working with OTS on the current concerns around pensions, including the issues around recovery plans; we included pensions in our recommendations for the Government's plan of support for the Third Sector.
The Pensions Regulator has news and advice on pensions issues. They have issued a statement for trustees, which recognises that recovery plan periods may need to be longer in the near future, and a statement on risks in the economic downturn.
Statement to Trustees
Alert to risks in the economic downturn
The Pensions Regulator has also published a new code of practice: Circumstances in relation to the material detriment test. Alongside this the Regulator has published a new module in their Trustee Toolkit entitled "Buy-ins and partial Buy-outs," which will provide guidance to those considering transferring pensions risk to insurers. This includes:
* what is meant by buy-in and partial buy-out
* the differing roles of the employer and the trustee
* the options and schemes' objectives
* data management and administration
* the process of bulk annuity purchase
Our CEO, Keith Hickey, recently wrote an article on the current state of charity pensions for Accountancy Age, "Charities and NGOs: grasping pensions."
Going concern
The Auditing Practise Bord has issued a Bulletin on going concern issues during the current economic conditions.
The FRC have issued an update for directors who adopt the Financial Reporting Standard for Smaller Entities: Going Concern and Smaller Entities.
Birdsong consulting have published a Charity Pulse report, entitled "Impact of the Recession of Voluntary Sector staff satisfaction".
The Chartered Institute of Personnel and Development have put together a guide, 'How to manage your workforce in a recession.'
The Workforce Hub has developed some 'How to' guides, including one called 'Survive the Recession - alternatives to redundancy.'
Recession advice and news
The Compact Commission has published a discussion paper on the impact of the recession on the relationship between government and the third sector.
The Charity Commission have launched a campaign called the Big Board Talk, based on the 15 questions that all boads need to be asking themselves at this time.
NCVO and the new minister for the Third Sector, Angela Smith, launched Support in Uncertain Times: Principles for managing in the recession, at the second Third Sector Recession Summit (10th June).
Sandy Adondirack's legal update is listing all the help available from voluntary organisations on the recession.
Several commentators have published articles with advice on what to do to survive the recession:
- Ian Allsop: Strategies for Survival
- Joe Saxton: Stairway to Survival
Get the latest news on the recession from the BBC's economy pages.
A report from the Smith Insitute has suggested that charities will see £200m wiped off the value of legacies, thanks to tumbling share and property prices.
Recent news on the recession has included predictions that medium-sized charities would be those hit hardest, their size meaning that they will be too small to cope with large losses and too large to be agile.
A study by Slate Street has found that, in addition to expected pressure on most income streams, charities investments have already seen a fall, losing 19% of their value last year.
Interest rate cuts mean that those charities who rely on investment income will be in a doubly tough position.
Meanwhile, Schroders have suggested that one way for endowed charities to protect themselves during the downturn would be to borrow against their property portfolios.