This is the second post in a series picking up on some legal/governance implications of drivers of change for charities in 2021 highlighted in NCVO's annual report "The Road Ahead" and, following last week's budget, the focus of this piece is on economic factors.
The #NeverMoreNeeded Coalition has articulated the sector's disappointment with last week's budget, when the Government reiterated details of last year's £750m support package for charities but took no steps to expand this support at a time when charities continue having to meet more demand with fewer resources.
So what note can charities take of wider economic drivers to maximise their financial position?
There is the prospect of the Bank of England moving into negative interest rates. While that could lead to reduced returns on investments and savings, charities might want to take advantage of cheaper long-term borrowing, possibly secured against their property, in which case registered charities should follow the requirements of the Charities Act to take financial advice on any mortgaging of their land.
Reserves may have been seriously depleted in the last 12 months and may continue to dwindle - but charities should ensure any investments they plan to realise are not restricted funds or permanent endowment or, if they are, then should take advice on what they may be able to do to release such restrictions.
And if a charity has received EU funding in the past, it could consider its positioning to participate in the UK Shared Prosperity Fund for when it launches in 2022. On 4 March the Government announced details of the UK Community Renewal Fund which is designed to prepare for the Shared Prosperity Fund by piloting new approaches to support people and places across the country.
#NeverMoreNeeded Coalition reacts to Budget 2021 3 Mar, 2021 • The #NeverMoreNeeded coalition, which represents thousands of social change organisations and charities across the UK, has responded to today’s budget announcement by Chancellor of the Exchequer, Rishi Sunak. The coalition’s joint statement: “This government has today made the deliberate choice not to listen to the collective voices of over 1000 civil society organisations who wrote to the Prime Minister and Chancellor asking for emergency support.