UK charities 'could face further shortfalls'
Charities
30th July 2010
The current climate for charities in the UK remains difficult with many facing shortfalls in donations, constraints on public sector funding and low interest rates on any savings they may have.
As a result, Giles Insurance Brokers Ltd. has advised that such bodies should ensure they have their insurance arrangements in order in such uncertain times, as this can help to alleviate concerns if they are to suffer cashflow problems. Organisations should ensure they speak to a specialist broker to check they have the best policies in place to suit their needs and should not be tempted to cut back on cover in order to generate savings, as this may put their operations in greater jeopardy.
Charities have been warned that the services they offer could be placed at risk by proposed government cuts to local authority funding. The National Council for Voluntary Organisations (NCVO) has urged councils not to view charities as an easy way to make savings, as such actions could have a substantial impact on vulnerable people, the BBC reports. According to the NCVO's Karl Wilding, ministers should "cut with care" and should not place a disproportionate burden of reductions on third sector groups.
Sarah Lyons, group managing director of Giles Insurance, advised: "Charities are facing a particularly uncertain time at the moment, making good and comprehensive cover more important than ever. For many, their costs are going up while donations and public sector support are declining and this could place some in jeopardy.
"An expert broker can provide information, advice and assistance in choosing the right policies to suit the needs of organisations of all sizes, from national bodies to small voluntary groups. This can help agencies to protect themselves against some of the potential risks they could be exposed to, which is more important than ever in the current climate."
A further warning was issued in June by the chair of the Charity Commission Dame Suzi Leather during a meeting at Westminster Central Hall, in which she cautioned that voluntary bodies are facing an "unprecedented" time of change and should adapt to the new economic climate to ensure their future survival. However, she added that the public has confidence in third sector organisations and they are likely to play a greater role in service delivery over the coming years through the government's concept of "the big society".
A recent report by the watchdog urged charities to put effective internal controls in place in order to meet requirements outlined in the Statement of Recommended Practice regarding transparent and accurate payment of expenses in order to ensure trust in their activities remains strong.
Meanwhile, the NCVO recently urged all MPs to back an amendment to the finance bill that would provide charitable organisations with an exemption to an increase in VAT which is coming into force on January 4th 2011, taking the levy to 20 per cent. It was tabled by the Labour party and was intended to free non-business activities from the rise from 17.5 per cent, but was defeated in a vote in the House of Commons and charities are advised their costs may increase as a result.
