Response to the government's Covid-19 social package

"There is huge ambition and scope on behalf of community businesses to be part of the recovery phase to this emergency."

Vidhya Alakeson

CEO, Power To Change

Yesterday, the government announced its package to help civil society groups and organisations. Here, Vidhya Alakeson outlines our response.

We’re relieved to see the government’s much needed package to aid our civil society groups and organisations who are working tirelessly to help the most vulnerable.

Details are yet to be announced but we hope that funding is available to all those whose work is charitable not just to organisations that are registered as charities.

We know from those we support that organisations making a lasting impact for the most vulnerable in our communities can have many legal forms.

As the Chancellor said, civil society is “playing a crucial role in the national fight against coronavirus, supporting those who are most in need” and that includes community business, social enterprises and other social purpose organisations.

The work has only just begun and there is huge ambition and scope on behalf of community businesses to be part of the recovery phase to this emergency.

So, we want now to work closely with Government to shape more extensive proposals for community businesses to meet the challenge of their lifetimes.

Many community businesses are already reaching out to cover the needs of their communities. People up and down the country are relying on them during the crisis.

They have been already been innovating to survive. They’ve increased non-state sources of funding, grown their donation base, began delivery of food and other services and restructured contracts with suppliers.

This deal needed to go further for them to be reassured.

Many of our community businesses have lost income. For example, of the 9,000 community businesses in England, we estimate on average 43% of their income comes from venue-based activities (e.g. cafes, shops, hiring out meeting space) – income they will now have lost. So it’s essential they can access the funding like other charities, as they share the same charitable aims.

The problem is compounded because many can’t furlough as they still need their staff in new or diversified service delivery. Or some must furlough to survive and so cannot operate at full capacity.

That’s why the government urgently needs to allow community businesses and VCS organisations to use staff as volunteers even if furloughed, subject to verification that they’re providing a charitable or social service.

Another opportunity to support these organisations is through VAT arrangements. Many community businesses are impacted by partial exemption which often means they can only recover part of the VAT they incur on costs. We recommend a 100% recovery rate for 12 months.

Looking to the recovery phase, we know there will be many, crucial demands on the public purse.

But we know that community businesses have a vital part to play in restoring and growing the social infrastructure that will enable individuals and communities to rebuild their lives. Government must prioritise support for them in the future to be a part of the solution.

We agree with the Chancellor; now more than ever is the time to fix our social fabric.

However, this package only goes someway to achieving this essential goal.

If you’re interested to find out more about the Government’s support for businesses and employers more generally, then read our blog on Government support for community businesses in response to COVID-19.