COVID-19 SUPPORT: Daily Update – Thursday 9 April 2020
Key Contact: Christian Farrow
Author: Chris Doherty
Support announced for UK charities
The Chancellor of the Exchequer, Rishi Sunak, has announced a £750 million package to support frontline charities across the UK to allow them to continue operating amidst the Coronavirus crisis.
The package will include £360 million to be administered directly by Government departments to charities providing key services and which support vulnerable people. This will include hospices, St Johns Ambulance, victims charities, vulnerable children charities and Citizen’s Advice.
£370 million will also be made available to small and mid-sized community charities (including a grant administered through the National Lottery Community Fund for charities in England).
The Government has also pledged to match any donations raised in aide of the BBC’s ‘Big Night In’ fundraiser, which will take place on 23 April 2020, and will donate a minimum of £20 million to the cause.
The devolved nations will receive £60 million of funding for charities through the Barnett formula, and the Welsh Government has already announced a £24 million support package for Third Sector organisations.
Government set to extend borrowing under the Bank of England’s ‘Ways and Means’ facility
The UK Government and the Bank of England (Bank) have agreed an emergency funding arrangement to help finance the support of workers and businesses impacted by the COVID-19 outbreak. This will be achieved through the extension of the “Ways and Means” (W&M) facility, the Government’s pre-existing overdraft facility with the Bank.
Economic activity has, understandably, slowed considerably over the last month, as social distancing measures have been introduced and many businesses ordered by the Government to close in order to slow the spread of the virus. To combat the impact of the virus, the Government has announced billions of pounds worth of support schemes and reliefs to help businesses and workers navigate the crisis.
Extending the W&M will provide additional liquidity to the Government in order to “smooth its cashflows and support the orderly functioning of markets” during the continued period of disruption caused by the Coronavirus outbreak.
The Government has confirmed that use of the facility will be temporary and that itwill “continue to use the markets as its primary source of financing”, with measures taken by the Government to tackle the outbreak to be funded “by additional borrowing through normal debt management operations”.
The outstanding balance of the W&M facility will be published weekly on the Bank’s website.
Please see our daily updated Financial Support Guide for Businesses for further information- COVID-19 FINANCIAL SUPPORT FOR BUSINESSES
For more information on any of the points raised, please contact our corporate team.
