As Liz Truss and her Cabinet are outlining their plans to tackle the cost-of-living crisis, many charities are struggling to cope with increasing costs and demand on their services. We’ll explore how the government can best support the charity sector and encourage charities to engage with policy makers.
In her first speech as Prime Minister, Liz Truss said that her three immediate priorities would be to grow the economy through tax cuts and reform, tackle rising energy costs and energy supply issues, and support the health service. She further pledged to transform Britain into a nation “where everyone everywhere has the opportunities they deserve.”
The aspiration of equal opportunities in society is one that underpins charitable values, but the gap between aspiration and reality is vast. The effects of the pandemic and the cost-of-living crisis are most keenly felt by those most disadvantaged and many British households went into this crisis with low levels of financial resilience, as recently reported by the Resolution Foundation.
What should Liz Truss’s government prioritise to support charities?
Charities play an essential role in the support network for the most marginalised and vulnerable members of our society. Many of them provide services that are now needed more than ever before, including health charities, food banks and women’s refuges. However, in a sector where increased demand does not go hand in hand with increased resources, more charities are now experiencing financial distress. The double whammy of increased cost pressures and falling donations limits charities’ ability to provide services to those in need and immediate action from the government is required to grow the economy and prevent even more people getting left behind.
In his letter to the new Prime Minister, ICAEW’s CEO Michael Izza urged the government to deliver long-term economically and environmentally sustainable growth to help organisations across the UK navigate difficult conditions and uncertain times. Izza challenged Truss to take urgent action to protect jobs and livelihoods this winter, to deliver a bold skills and productivity strategy and to set out a long-term plan for tax and public spending to reduce uncertainty.
Responding to the immediate crisis, NCVO and other voluntary sector partners call for targeted support and urge government to “deliver meaningful financial support to those in greatest need, directly to households and through the benefits systems” and to extend targeted financial support to charities and voluntary organisations working on the frontline of supporting people through this crisis.
The cost-of-living crisis and rising inequalities are a global problem and the war in Ukraine, floods in Pakistan and food shortages in East Africa are all reminders that we mustn’t neglect our global responsibilities. Bond, the UK’s international development network, remind James Cleverly, the newly appointed secretary of state for Foreign, Commonwealth and Development Affairs, that a long-term approach is needed to keep UK aid poverty focused. Bond CEO Stephanie Draper called on Cleverly to work towards returning the UK aid budget to 0.7% of GNI after it was cut to 0.5% under Boris Johnson. The creation of the role of minister for development (appointment: Vicky Ford) is seen as a boost for international development programmes.
While action from the government is crucial, charity leaders are right to manage their finances carefully. Fortunately, grant funders increasingly recognise the need to support frontline charities with core funding. However, robust financial controls, well-considered reserves policies, fully-costed funding bids and planning for inflation are all important elements of financial management at this time and will be addressed at our upcoming event for trustees and advisors of smaller charities.
Charities need to engage with policy makers to influence effectively
It is too early to assess whether Liz Truss’ government will be successful in reducing societal and global inequalities with decisive action and targeted support. However, it is never too early for charities to seek stronger relationships with ministers to influence policy effectively.
Nicole Sykes, Policy and Communications Director at Pro Bono Economics (PBE) advises charities to make the most of the reshuffle of ministers and play an active role in offering insights, “as new Ministers take up their posts, one of the early decisions many will make is whether or not they will maintain the groups which regularly advise them. From nuclear energy to suicide prevention, human rights to apprenticeships, and HIV to heritage, social sector organisations are providing valuable viewpoints that Ministers will hopefully continue to hear from.”
PBE’s five recommendations for charities wanting to influence Conservative MPs are based on conversations with policy makers and encourage charities to be well-informed on government structures and to consider the MP’s perspective and needs in order to build stronger relationships.
MPs and voluntary sector groups both have responsibility to benefit the communities they serve. The latest Cabinet reshuffle may offer opportunities for new conversations and stronger connections.