Funding needed to help charities upgrade old buildings, report says

Charities need capital funding to upgrade old buildings to make them more energy efficient, a government report has found.

The evaluation of the government’s £25.5m energy efficiency scheme, which helps voluntary, community and social enterprise organisations in England improve their energy efficiency, found there is still a need for improved funding for upgrades to VCSE organisations’ premises.

The report was published by the Department for Culture, Media and Sport, and included interviews with VCSE organisations.

The main reflection for the wider VCSE sector related to provision of capital funding, with the report saying: “There is – and remains – a need for support to the VCSE sector to improve its energy efficiency and, according to programme partners and VCSE organisation representatives, there remains a general lack of capital funding available to support organisations to do this.

“The evaluation also highlighted that many of the applicant VCSEs’ buildings were old, and interviews highlighted that there were often other, structural, works required before energy efficiency measures could be installed. 

“This indicates a wider need for capital funding to address such challenges, to then enable VCSE organisations to participate in schemes such as the energy efficiency scheme to reduce both their costs and their carbon footprint.”

The report found some VCSEs were reliant on depleting their financial reserves to pay for substantially increased energy bills during the cost of living inflationary period. 

Several VCSE representatives noted that the anticipated savings from their energy efficiency scheme installation would help future-proof against uncertainty, by enabling them to rebuild reserves.

In the report, one VCSE representative from a capital grant application said: “[Our] financial reserves were very depleted because of our high energy bills; future savings on energy will allow us to replenish our reserves.”

Another said: “We will hopefully be able to get out of fuel poverty and reduce our energy spending from 12 per cent. 

“As a result of this we can start building our financial reserves, which will make our services more secure and sustainable.”

Jack Wakefield, policy manager at Social Investment Business, said the report highlighted the “urgent need for investment to safeguard the VCSE sector, which is burdened with draughty, inefficient buildings and high energy bills”.

Wakefield said: “While the energy efficiency scheme brought much-needed capital funding at pace, our own research has found that a staggering 50 per cent of community buildings fall below basic energy efficiency levels, and this rises to three in five buildings in areas of high deprivation. 

“Running these inefficient spaces comes at huge cost to local groups, with some paying out as much as half their entire budgets just to cover utility bills.”