Charities running community buildings face a fresh financial crunch in March when their energy deals change, research has warned.
About half of community groups running village halls and other local buildings will have to renew their energy tariffs in two months’ time, the analysis says.
But they still do not know what support will be available from the government to help cope with soaring bills after March.
One charity said that the new energy contract they had been offered would see annual costs rise from £1,700 to £7,500 after April.
The analysis is included in a report published today by Community Matters, based on survey data provided by more than 120 charities running community centres, village halls and hubs, nearly all of them in England.
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 per cent of respondents’ fixed tariffs will expire from March 2023”.
The government is currently subsidising energy bills for all businesses, including charities, but this support is due to end in March. Ministers have not yet announced what help will be available after this date.
The analysis also found that 74 per cent of charities running community buildings had seen demand rise during the cost-of-living crisis while 56 per cent said that their financial position had deteriorated during the same period.
Just under half – 47 per cent – said they had been operating as ‘warm hubs’ for local people who could not afford to heat their own homes during the winter.
A forty-year high in inflation, driven by sharply rising energy costs, has created what experts called an “all-hand-on-deck crisis” for the voluntary sector.
Research by Pro Bono Economics released last month found that organisations were working in the dark, discouraging staff from driving and spending down their reserves as they tried to deal with soaring costs.
One charity that runs a community hall, quoted by Community Matters, told researchers that it had been “just about covering its costs” but rising bills and lower numbers of paid bookings since Covid-19 meant the organisation risked folding.
They said: “[We] only have a small amount of money in our account that is just getting eaten up.”
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.”
The report uses a subset of data first collected by Pro Bono Economics.