Action is needed to ensure charities with a large chain of shops do not continue to miss out on state aid to cope with Covid-19 income loss, according to charity tax and retail experts.
The Charity Tax Group (CTG) and Charity Retail Association (CRA) want ministers to remove restrictions that have meant charities with more than 30 shops have been unable to access the Retail Hospitality and Leisure Grant Fund.
The fund closed to new customers in August but the charity sector groups want money that has not been allocated to be made available to more charity retailers.
While the government had allocated £12.33bn for its grant schemes, as of 30 August £11.01 had been paid out, meaning that £1.32bn of funding remains.
CTG and @CharityRetail urge Ministers to review state aid restrictions on the retail grant scheme following news of a £1.32 billion underspend on COVID-19 Business Grants - Charity Tax Group https://t.co/IdbuhuQw0C— Charity Tax Group (@CharityTaxGroup) September 4, 2020
“The application of state aid limits to the funding means that in practice charities with retail chains have been limited to applications for approximately 30 shop, despite many running many more than that,” say the two sector bodies.
“This is despite all shops facing on going running costs and facing extended periods of closure and staggered re-openings.”
The CRA estimates that charity shops lost more than £285m in sales during Covid-19 lockdown.
“Charity shops play a unique role on the High Street and continue to be impacted by lower sales due to the pandemic which is why we are again urging ministers to remove state aid restrictions preventing larger charity retailers receiving retail grants for more than around 30 shops,” said CRA chief executive Robin Osterley.
He hopes that the government may have scope to remove funding restrictions for charities as their shops do not compete across international borders.
CTG vice chairman Richard Bray added: “Charity shops contribute so much to the local communities in which they operate. Government support can help ensure that they continue to do this in spite the harsh financial climate caused by COVID-19. But a decision is needed now before there is damage that cannot be reversed.”