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The voice of Scotland’s vibrant voluntary sector

Published by Scottish Council for Voluntary Organisations

TFN is published by the Scottish Council for Voluntary Organisations, Mansfield Traquair Centre, 15 Mansfield Place, Edinburgh, EH3 6BB. The Scottish Council for Voluntary Organisations (SCVO) is a Scottish Charitable Incorporated Organisation. Registration number SC003558.

Charities fear unsustainable running costs as energy support scheme ends

This news post is over 1 year old

Organisations with premises face a running cost crisis as support ends

Charities are bracing themselves for huge hikes in energy bills after the UK government announced that current support will end in March.

The government provided a package of support for non-domestic users through this winter, worth £18 billion.

However ministers have been clear that such levels of support were time-limited and intended as a bridge.

The government says the new scheme strikes a balance between supporting organisations over the next 12 months and limiting taxpayer’s exposure to volatile energy markets, with a cap set at £5.5 billion.

Chancellor Jeremy Hunt said: "My top priority is tackling the rising cost of living - something that both families and businesses are struggling with.

"That means taking difficult decisions to bring down inflation while giving as much support to families and business as we are able."

UK-wide research published this week by Community Matters, based on survey data provided by more than 120 charities running community centres, village halls and hubs, shows charities, especially those running community buildings, face a fresh financial crunch in March when their energy deals change.

The report says that fixed tariffs for electricity and gas costs mean that “a large number of organisations have been partially insulated from the large increase in utility costs up to this point. However approximately 50% of respondents’ fixed tariffs will expire from March 2023”. 

Despite wholesale gas prices being below the level they were before Russia's invasion of Ukraine, they are still three to four times higher than their long-term average.

Some community groups say they have been offered deals by energy providers at least triple their current bills.

The report says that the way community buildings are run may leave those charities particularly at risk of these financial challenges.

It says: “Because of their funding model, community spaces are vulnerable to the current large rises in utility costs. 

“Most community spaces are funded from community use, and there is a finite level of charges that can be levied on these groups.

“In many cases these buildings are the only place that communities can come together, especially in more rural areas or urban areas of deprivation. 

“Many community spaces are old buildings which are not the most energy efficient. The current government support with utility costs is welcome, but the uncertainty from April is a concern.”