MPs have issued the government with their wish list of ways support for small charities can be improved.

The recommendations were made by more than 20 MPs to civil society minister Stephanie Peacock during a parliamentary debate held this week on the small charities sector.

The debate was opened by former Conservative Party leader and MP for Chingford and Woodford Green, Ian Duncan Smith, who warned that government takes “grassroots charity too much for granted”, adding “they did before and still do now” and that “this is not party political”.

Duncan Smith also said that the small charity sector “is a delicate flower” that “we need to nurture.. in everything that we do”, and while it “has been doing fantastic work…it has been healthier”.

Banking access

Among MPs calling for improved support for small charities during the debate was Labour MP for South West Norfolk Terry Jermy. He wants to see small charities given better access to banking services, amid branch closures.

“Many groups and charities tell me that they increasingly struggle to process funds that they receive in cash,” he said.

“The lack of availability of banks, particularly in rural areas such as mine, is now a real barrier to fundraising for smaller charities.

“The added costs of processing cash and the associated risks of staff and volunteers handling cash are important to consider. I ask the Government to give some thought to what can be done to assist local charities with this practical challenge.”

A report in 2024 found that nine in ten charities have experienced one of more banking related challenges.

VAT changes

Changes to VAT is another top ask from MPs, highlighted by Angus MacDonald, the Liberal Democrat MP for Inverness, Skye and West Ross-shire.

He raised the issue that “unlike VAT-registered businesses, charities cannot reclaim the VAT they pay on essential costs, from maintaining their premises to repairing vehicles.

“Does the Minister agree that reviewing the VAT rules for small charities could be a practical and immediate step to relieve some of the intense financial pressures facing the sector?”

In her response to MPs Peacock said that she will write to the Treasury to make ministers there aware of MacDonald’s concerns.

Partnership working

Also, on MPs’ wish list for improved support is helping small charities be more effective through collaboration and partnership working.

Labour MP for Stoke Gareth Snell used the example of local support charities “often trying to meet one need, but that is spread across multiple phases”.

“If there were a way the Government could help with multiple needs assessments that allow charities to work collectively, it would be a massive boon for my city.”

On a similar theme Liberal Democrat MP for Bath Wera Hobhouse said partnership working is important for local charities to help tackle “the fragmentation of local delivery” that is impeding their effectiveness.

She said that regular meetings between small charities can help “eliminate the barriers” they face in administration, monitoring and governance, that “large national charities navigate with relative ease”.

Meanwhile, Conservative MP for Salisbury John Glen wants to ensure small charities are “put front and centre” in the government’s Pride in Place strategy, which is seeing £5bn given to nearly 250 areas across the UK to make long term improvements for communities.

“It is important that those people who really understand what is going on in a community are allowed to be meaningful beneficiaries, over 10 years of the investment the Government are making, and that everything is done to hear their voices, he said.

However, he warned that “often they are taken out of the main conversation”.

Charity closures

Lib Dem MP for Eastleigh Liz Jarvis warned that small charities are being forced to close amid rising demand and deficits.

“If we continue on this course, we risk losing an essential pillar of the social fabric that holds our communities together,” she said.

“It is absolutely crucial to ensure that small charities are supported in the UK.

“They are embedded in their local communities and are often their beneficiaries’ only lifeline.

“The Government must take all necessary steps to ensure they can maximise their impact for the people and communities who depend on them.”

In her response Peacock paid tribute to small charities “and the critical support that they provide to people across the country”.

She added that “I do not recognise” Duncan Smith’s assertion that the government takes small charities for granted.

“Small charities make up the vast majority of the voluntary community and social enterprise sector," said Peacock.

"Those responsive, locally engaged groups are often best placed to understand the strengths, capabilities and cultures that make up their local communities.”

She added that the government’s Civil Society Covenant, which was published last year, “represents a fundamental shift” in how ministers and Whitehall works with the sector.

“I acknowledge that we can always do better, but the Covenant is about having the ambition to do exactly that,” she said.

A report published last month by NGO organisation Bond warned that the Covenant has been marred by a "slow start", delays, and U-turns.

Small charities praised

During the debate MPs also detailed the support specific small charities offer.

Duncan Smith used the example of a suicide prevention charity based in Portsmouth called Ripple which was set up by Alice Hendy after her brother Josh took his own life.

A focus of Ripple has been to improve online support.

“From her bedroom in Portsmouth, Alice created a browser extension that intercepts crisis searches, offering a calming breathing exercise before signposting people to accessible local services,” explained the former Conservative Party leader.

“I have seen it myself, and it is quite brilliant—the members of the Government who saw it were also taken aback by how remarkable it is.

“What began as a response to personal tragedy has become a lifesaving tool that has now been downloaded—believe it or not—more than 2 million times. This is a small idea, from a small set-up in a bedroom, that is now being used more and more widely.”



Other small charities to be featured in the debate include Love in a Box, highlighted by Alloa and Grangemouth Labour MP Brian Leishman.

This was founded by two women in the area who want “every kid in Clackmannanshire to experience the festive season”, he explained, by making sure “that every child wakes up on Christmas morning with presents to open”.

Another MP to highlight work by charities in their constituency during the debate was Danny Kruger, who represents East Wiltshire for Reform UK, after defecting from the Conservative Party last year.

He praised the work of small charity run link schemes in the area that drive "people around the county, particularly to medical appointments” adding “that is such an important service, provided totally free and voluntarily to the community”.

Meanwhile, charities mentioned in the debate by Ayoub Khan, the independent MP for Birmingham Perry Barr, included the George Coller Memorial Fund, which is a “local charity that has punched well above its weight over the years, campaigning successfully to enable schools to store and administer emergency inhalers” for those with asthma.

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