The government is 'burying its head in the sand' about a crisis within the charity sector, and re-opening charity shops won't be enough to save it, MPs have warned.

Members of the DCMS committee today said the government's response to the crisis had been 'deeply disappointing' and that it was failing to acknowledge the true impact of Covid-19 on voluntary organisations.

The comments came after the government published its response to a report detailing the impact of Covid-19 on charities, which asked for a separate job retention scheme for charities, allowing employees to volunteer for their own organisation.

But the government said the scheme is not designed to help charities cut the cost of delivering essential services, pointing organisations to the £750m funding package it announced in April.

The funding package was unveiled shortly after sector leaders published figures showing charities are set to lose over £4.6bn as a result of the pandemic.

Although charities welcomed the £750m, many claimed it was 'merely a drop in the ocean'.

The government said it is important to “strike the right balance between supporting the sector’s important work and ensuring its ongoing independence and sustainability”.

It highlighted the various funds that that have been raised for the sector through fundraising campaigns, such as the BBC's Big Night In, and through grants offered by corporate firms and the National Lottery.

However, DCMS Committee chair, Julian Knight, said the government "still doesn’t seem to understand that there are charities providing vital services, which are not directly related to the Covid-19 response, that need further support."

“The government is taking a head in the sand approach to the plight of charities, struggling for survival against lost income and soaring demands for their services from people hit hard by the Covid-19 crisis. Ministers fail to recognise that the charities and voluntary sector present a special case at such a critical time for the country," he said.

“Our report made a clear call on government to urgently review whether its schemes to help businesses really met the needs of charities at risk of closure. We also urged backing for a stabilisation fund which would ensure the viability of this sector to provide longer term support for those in need in the difficult times ahead.

“The fact that the government has failed to engage in any meaningful way with wider issues raised by our report, including the lack of clarity about how charities can access the funds that are on offer, is deeply disappointing. Charity shops might be reopening for the first time since lockdown but their future is far from secure.”

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