Community Forum, North East - July 2020

On 13 July Chief Economist Andy Haldane held his first virtual Community Forum with third sector representatives from the North East. His reflections are below.

As part of our Community Forum programme, I travel to regions across the UK to find out about the economic concerns facing people from all backgrounds.

On recent visits to the North East, I have met with the Jewish Orthodox Community in Gateshead, walked the high street in Ashington and visited many projects and charities. Last year I also attended an event with a number of charities hosted by the Newcastle United Foundation at St James’ Park. That was a real show of my commitment to the cause as a lifelong Sunderland fan, I can tell you!

This year, however, as a physical visit was not possible, I decided to host my first virtual Community Forum. This was attended by representatives from various charities and organisations across the third sector including a community bank, sports club, foodbank and a large charitable foundation among others.

From Redcar in the south to Ashington in Northumberland, we made the most of the virtual delivery model to ensure we got a real breadth of views from across the region.

Unsurprisingly, the big focus of our discussion was the effect Covid-19 is having on the voluntary sector and what the main challenges facing the North East in this uncertain time are.

The first big theme that emerged was the financial health of the third sector. Many organisations stressed that, although short-term solutions have been put in place, they were concerned that not enough is being done to support charities in the long run.

As unemployment rises and some incomes fall more people are turning to charities for help and support. I heard how charities and organisations will be unable to sustain the current level of support without further funding and grants. The level of corporate and public donations had fallen sharply.  And this hit was especially acute for charities who relied on their high street shops for trading income. This had left many charities concerned about their long-run viability.

One organisation highlighted the fact that local authorities might have to change the way they operate given the pressures on their finances and the hit to existing sources of income such as property investments. As they need to find new sources of revenue, the rates at which they rent shops and office spaces to charities could pose a threat to some charities.

Many of those around the table stressed that we are just at the start of the fallout from this crisis. As more people are made redundant or start facing the reality of their financial futures, more will inevitably turn to foodbanks and debt services for help and advice.

It was interesting to learn that charities have a difficult time in securing loans as they do not operate in the same way as normal businesses which means they can’t always meet the lender’s criteria. Some charities mentioned that even where they can get the funding, they have to pay a higher rate to access it. There was a strong feeling that some lenders need to do more to understand the business model of a charity to be able to offer better financial products and solutions.

The next topic we discussed was the impact Covid-19 is having on mental health. One charity commented that people who didn’t have very much to begin with now feel even more marginalised and distant. New foodbank users who were previously employed are struggling with their new reality as they never thought they would need to rely on food parcels. Another charity mentioned that one of their clients hadn’t had a conversation with another person since March. Loan sharks are also causing a strain on people’s mental health as they pressure those to repay loans who simply can’t.

There was a strong call from the charities for more collaboration between sectors across the region – and, encouragingly, some evidence that it is beginning to happen. They thought that third sector leaders should consider how they can join up, share best practices and work on models that benefit many communities across the region. We also heard a call for more to be done to support youth employment and growth.  And it was felt that there needs to be greater support for access to basic technology and broadband as more and more critical services are now accessed online.

Whilst the above merely touches on the conversations and issues raised, I am really grateful to everyone who contributed and gave me so much to think about. I will report what I have heard to my colleagues and Mauricio and Gareth in our North East Agency will continue to engage with all across the sector to ensure we understand the full impact of Covid-19 on our current economy.

I would like to thank everyone who joined the discussion. Having your input is crucial in shaping our overview of the economy especially at this critical time which is filled with so much uncertainty. I would also like to thank our North East Agency for organising the call and for bringing such a diverse and engaged group of organisations together.

This page was last updated 04 August 2020

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