Specific Needs of Charities During the Coronavirus Pandemic
Total Page:16
File Type:pdf, Size:1020Kb
Written evidence submitted by the National Church Institutions of the Church of England Specific needs of charities during the Coronavirus Pandemic The Church of England is made up of thousands of different organisations under one umbrella. The following component bodies are impacted by Coronavirus: 12,382 parishes, with each parochial church council being an independent charity, most of which are currently excepted from registration as their income and expenditure is below the current threshold (which is due to expire in 2021). 42 dioceses (including the Diocese of Sodor and Man and the Diocese in Europe) (independent regional offices), with each diocesan board of finance being a separate, registered charity and whose most significant income stream derives from parish churches paying their ‘parish share’, an income stream that has instantly dropped since church buildings closed. A Diocesan Board of Education for each diocese in England, responsible for educating one million children. Their income is reduced because schools are closed and so conferences, training and support is all on hold and income will suffer, as will the National Society’s (the national charitable body for Church education) income which comes through networks, programmes and conferences which schools and school leaders are unable to access through this season. 42 cathedrals in England which at present are not charities for the purposes of the Charities Act 2011 but are recognised as charitable by HMRC for purposes of fundraising, holding restricted funds, claiming Gift Aid etc. They have lost income from visitors, retail and catering, conferences and hire, and seen the value and yield of investments plummet. A number of registered charities come under the Church of England banner, such as Theological Education Institutions and Mission Agencies such as the Church Urban Fund. The National Church Institutions (NCIs) include the registered charities of the Archbishops’ Council, the Church Commissioners, the Church of England Pensions Board and the National Society for the promotion of Religious Education. The Archbishops’ Council is responsible for coordinating the national work of the Church of England and therefore makes this submission on behalf of all parts of the wider Church. The Church of England is uniquely positioned to help with national recovery from this pandemic. Many of our churches are co-ordinating local support for the vulnerable, and we are seeing widespread engagement with the digital services churches are offering during lockdown. As in all times of stress and crisis, people will need cathedrals and churches when the pandemic is over: so people can gather to mourn those who have died, celebrate the NHS and others who have worked so hard to keep our nation functioning, to give thanks for surviving the crisis, and to rebuild communal life. Short-term measures to keep our charities operating are needed, both for what they are doing now and for what they will need to be ready to do as we recover. Impact of Coronavirus We estimate a financial loss to our parish churches of £8m-£11m for each week they are closed. This is primarily because of a cessation in collection plate funds coming in, as well as the associated Gift Aid. We are also seeing losses from cancellation of regular and one-off events bookings in our churches and church halls, and at cathedrals a drop in donations and income from visitors and events, and in rental income from commercial tenants. This headline figure doesn’t take into account the dispersed nature of the Church as independent charities. For some parishes and dioceses there will be a more significant impact, which will be a threat to their financial viability. These church closures have had an impact on our churches and communities. While we have been able to institute electronic alternatives in many circumstances, these do not make up for the loss in ability to meet. This will have impact in our communities – through the community experienced among churchgoers, but also because of an inability to celebrate significant events such as weddings, baptisms, and funerals, and not providing a place of prayer for those who seek this. We have had to stop the majority of our 33,000 social action projects. We have prioritised keeping food banks running within social distancing guidelines and have worked with the Department for Education to ensure all children eligible for free school meals can continue to receive support. We are very aware that the amount of need across society has increased at a time when it is hardest for us to support people as we would wish. In a more limited way, we are incurring additional costs because of Coronavirus. These include the costs of mothballing non-essential construction projects (often with contingent costs such as extended scaffolding hire), the additional costs of supporting communities, and the necessity of investing in new technologies for e.g. livestreaming services from priest’s homes. Churches will also face a loss of momentum where they have reached critical points in new projects. While this impact on the Church of England is significant, there is some ability to dissipate some of the financial cost through our various charities but this is limited by the legal restrictions that apply to many of our funds. Other Christian denominations and churches may have a greater degree of independence between their charities and so face greater impact. Areas where our charities need additional support: 1. Inclusion in business-related support measures Only a small minority of the charities under the Church of England umbrella are at present able to benefit from government measures as most do not employ staff and are not registered for business rates. Our largest entities – the NCIs and some dioceses and cathedrals are able to benefit from the 3 month deferral of VAT payments, but most of our Church entities do not make taxable supplies and are not registered for VAT. Some cathedrals, our largest trading operators, will be eligible to apply for grants from the Retail, Hospitality and Leisure Grant Funds, but a number of cathedrals (and almost all churches) do not pay business rates or do not have rateable values at or below £51,000. Whilst we welcome the fact that the Business Interruption loan scheme backed by the British Business Bank has now been extended to include religious organisations, the scheme is unlikely to have wide applicability to our Church entities since, like other charities, they are not in a position to take on debt finance as they do not generate the level of surplus income with which to repay loans and service interest. The NCIs have made available a £75m liquidity fund to support dioceses and cathedrals with immediate cashflow difficulties by allowing increased time to pay sums due for the national clergy payroll and making advance payments of grants. However this will not compensate for the permanent loss of income suffered by most of our parishes as a result of church buildings being closed. To support all our parishes, as with any number of smaller charities, government support is needed. Whilst we are grateful for all measures so far put in place, we believe that charities such as our parish churches need additional support to assist with both immediate cashflow issues to meet financial commitments and longer-term planning in the context of falling voluntary income. If it is possible to do so we would like to see current support for businesses extended to charities, especially the grant funds. Something equivalent to the government Small Business Grant Fund, but aimed at charities, would be very welcome. 2. Clarity over length of job retention scheme The job retention scheme is a lifeline for our dioceses, larger churches and cathedrals, and some linked charities. We ask that government extend the scheme beyond the end of May and for as long as it is needed. It is likely that for those affected the impact to operations, such as hosting events, will not return straight away as restrictions begin to be lifted. We would ask consideration is given to organisations who will likely see a longer-term impact to staffing and finances as operations begin to restart. We ask that the CJRS be organised in a way that ensures flexibility so that staff can return to their jobs over a period of time (as not all can be reinstated on day one of removal of the current restrictions), and continue the scheme for reducing quantities of staff over a number of months as cathedrals return to normal activity levels and income streams revive, thereby minimising redundancies. We would also like to see added flexibility to the scheme for charities and small businesses so they can re-employ staff initially on part-time hours with the CJRS topping up salaries. This recognises that in many cases there will initially only be work for part of a person with a particular skill set until activity levels build. If the CJRS can only be a short-term measure, we ask that you give at least six weeks’ notice of when it will end, providing time for planning staff retention and redundancies to minimise the financial impact of letting staff go. We ask for government assistance with funding such redundancy payments as cannot be avoided. For charities, redundancy payments cannot be offset against taxable profits and have to be funded from charitable income. 3. Flexible options for furloughed staff Some parts of the Church are benefitting from the job retention scheme and have furloughed those staff whose roles cannot function during this period. However most still have very necessary work to be done. We would join the call others have made to look at whether staff furloughed from their organisation could volunteer back in another capacity to meet the current extraordinary need albeit in roles different from that for which they are employed.