ACEVO puts forward 16 point plan ahead of third sector summit 17/11/08

Ahead of the Government / third sector summit being held on Monday November 24, hosted by NCVO and co-chaired by Third Sector Minister Kevin Brennan, ACEVO has called for a ‘great debate’ on how Government can support the third sector through the recession.

Third sector organisations are facing numerous challenges, with rising costs and falling income set against increasing demand for their service - such as those for the homeless, the unemployed, or the victims of domestic violence.

Stephen Bubb, CEO of ACEVO, said: “Third sector organisations in the UK will play a crucial role in dealing with the effects of recession, but for them to do this Government will need to support the sector as it responds to the damaging social effects of economic downturns such as rising unemployment, homelessness, depression, domestic violence, ill-health, and other issues exacerbated by recessions.”

“The upcoming summit is an important opportunity for us to thrash out a package of Government support, not only so that we can survive the recession, but to lay foundations for the future development of the sector after the recession has passed.”

“It is important that any support we agree on at the summit be based on lively, broad-ranging and open debate across the third sector. We are trying to kick-start the debate with some big ideas of our own. We want to hear from as many people as possible, not only to hear what they think of our ideas but also to draw on any ideas they may have themselves.”

ACEVO’s 16 proposals to kick-start the debate are:

1. £500m emergency cash-flow support

- In times of economic downturn TSOs find themselves with less income which can dramatically affect their cash flow

- Government should provide an emergency £500m fund to support cash flow to enable charities to remain solvent.

2. Thriving Local Third Sector Fund

- Third sector organisations play a vital role in society, and the Government has recognised this by making one of targets (National Indicator 7) for local authorities a ‘thriving third sector’. In a recession the third sector’s role is even more important but the danger is that local authorities will reduce funding to cut costs.

- Government should provide ring-fenced funding to support local authorities in their efforts to encourage a ‘thriving third sector’

3. Guarantee existing CSR programmes from nationalised banks

- Some ACEVO members have reported newly nationalised banks are considering shutting existing corporate social responsibility schemes.

- Newly nationalised Banks should honour commitments made to their communities.

4. Greater bank lending

- third sector organisations have been finding it harder to access funding from banks.

- Government should ensure that third sector organisations have opportunities to access capital as they have done in the past.

5. Public Service Action Plan 2

- third sector organisations have massive un-tapped potential in delivering public services, and despite the progress made under the first Public Service Action Plan (created by the Office of the Third Sector in the Cabinet Office) there are still barriers to be overcome.

- A second Public Service Action Plan should be drafted in consultation with the sector to give another big push to third sector delivery of public services

6. £250m Creation of a Social Investment Bank

- third sector organisations have historically had difficulties accessing funds from mainstream banks.

- As called for by the Commission on Unclaimed Assets, Government should provide £250m to start up a social investment bank to provide charities with access to capital.

7. Reform Gift Aid

- Currently £700m goes unclaimed.

- The system should switch from the current administratively burdensome system to one where charity’s accounts are used to calculate the amount of Gift Aid they are entitled to.

8. Reform VAT

- A huge cost to third sector organisations comes from irrecoverable VAT

- Government should compensate third sector organisations for all irrecoverable VAT

9. Charitable Remainder Trusts

- Lack of tax incentives for Charitable Remainder Trusts is inconsistent with the general tax approach towards the third sector, and is resulting in lost funds.

- Government should demonstrate its support for Lifetime Legacies through reforming their tax approach to Charitable Remainder Trust giving.

10. Payment in 10 days from statutory bodies

- Many third sector organisations can be particularly hard hit by late or non-payments to them by statutory bodies.

- Any and all payments from governmental bodies to third sector organisations should be made in 10 days, as offered to Small to Medium-sized Enterprises in the Government’s recently announced SME support package.

11. Free health checks

- Third sector support organisations face a unique combination of falling income, rising costs and rising demands.

- Government should match the offer recently made to SMEs of free health checks from an organisation such as ‘Business Link’

12. Access to training

- The crucial role third sector organisations will play in the coming months and years will require a motivated and skilled workforce.

- Government must invest in the training of third sector staff and volunteers for the future, mirroring the £350m announced by Government for small to medium-sized enterprises.

13. Icelandic bank deposit guarantee scheme

- Up to £200m could be at risk and some third sector organisations could be forced to cut services to the most vulnerable as a result

- Government should offer 0% interest, unsecured loans to all organisations affected until their money is retrieved from failed banks by the administrators

14. Double the Grassroots Grants scheme to £260m

- Smaller third sector organisations could be badly affected by the downturn as donations and funding streams dry up.

- The Grassroots Grants scheme (funded by the Office of the Third Sector in the Cabinet Office) should be doubled, there should be an active campaign for matched corporate funding, and the scheme should be extended beyond 2011.

15. Mainstream third sector organisations into the Government’s response to recession

- Government has announced various measures to support people through the recession (e.g. household energy packages), but the potential for third sector organisations to contribute to that support has not been maximised.

- In a similar vein to the public service action plan, the Office of the Third Sector in the Cabinet Office should work with other government departments to enable charities are able to play their full role in supporting people through the recession

16. Support for the difficulties that many third sector organisations will have with their pension schemes

- Numerous third sector organisations face serious difficulties with their pension schemes as a result of the economic downturn

- Government should work with the third sector to address these difficulties.

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