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'Disappointing' government response to sector pleas for help

Finance | Tania Mason | 29 Oct 2008

Last night's meeting between sector umbrella bodies and third sector minister Kevin Brennan to discuss what the government plans to do to protect charities affected by the Iceland banking collapse was "inconclusive", according to acevo chief executive Stephen Bubb.

"We made our case for support and they are considering it," he told Charity News Alert this morning. "They said they would come back with an answer quite quickly, but didn't give a date."

And the Treasury's response to acevo's demand for a £500m emergency bailout fund for the sector and new action on gift aid, delivered to Bubb on Monday, was "frankly disappointing", he added.

The letter, from Treasury minister Angela Eagle, pointed out that the government was already investing £515m across the third sector over the current three-year spending period, and that the gift aid issue was complex and required a full assessment of the risks.

Brush-off

"The letter promises nothing," Bubb said. "The message is that we have had all we are getting. This is simply not good enough. Circumstances have now changed.

"I know a brush-off when I see it. But this response merely ensures I will be even more energised to fight our case."

Last night's meeting between the government and the voluntary sector delegation of Bubb (pictured), acevo chair John Low, NCVO chief executive Stuart Etherington and CFDG's policy manager Ernese Skinner on the Icelandic banks crisis was little more encouraging.

Bubb said Brennan and the Treasury officials present understood the seriousness of the situation for the affected charities, but made clear that they had also to consider the impact on other groups such as local authorities and universities.

Extent of Iceland problem

The sector bodies are remaining tight-lipped about the extent of the problem for charities - an appeal to NCVO members to come forward and divulge how much money they had tied up in Icelandic banks has reportedly not sparked a huge response. The Charity Commission too is still refusing to reveal its estimate.

The NCVO has said previously that it believed about £120m of charity money is at stake, but one bank's own website has stated the figure is closer to £230m.

Loan fund proposed

One of the options proposed by the sector delegation was a loan fund that affected charities could access immediately while the Icelandic banks' administrators decided how to proceed.

Bubb said he had met with Kaupthing Singer & Friedlander's administrator, who had admitted the administration process "could take years".

"The administrators obviously want to secure the best deal they can. In the meantime, organisations need access to money, they are drawing up budgets for next year and considering their revenue positions."

Agreed line for summit meeting

Acevo wrote to all its members yesterday to gauge their views on what should be contained within the sector action plan that the umbrella bodies will present to the government at the summit meeting in late November.

Bubb highlighted the "clear determination by NCVO and acevo to work together on an agreed line with which to pressure the government".

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Who's Who: Tania Mason