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Support Amongst Third Sector Leaders for Charity Shop Rating Proposals

Support Amongst Third Sector Leaders for Charity Shop Rating Proposals

Proposals to make charity shops in Northern Ireland pay rates at 10 percent are supported by a significant number of third sector leaders, as long as the revenue raised goes directly towards developing entrepreneurship in the sector, a study reveals.

In proposals outlined in November, Finance Minister Máirtín Ó Muilleoir suggested that he would consider reducing rating relief on charity shops from 100 percent to 90 percent, and would be in favour of the income being used to support entrepreneurship amongst social enterprises.

In the latest Ulster Bank & CO3 3rd Sector Index, published today, half (49 percent) of almost 200 leaders in the sector surveyed said that they would agree with this approach. 38 percent said that they would disagree, whilst 13 percent said they were unsure.

Support for rating on charity shops drops considerably amongst respondents however if a commitment to direct the funding into the sector isn’t included. In this scenario, two-thirds would favour a continuation of full rates relief.

This comes at a time when Northern Ireland third sector leaders expect economic conditions in Northern Ireland to deteriorate during the course of 2017. 59 percent expect the economy to worsen over the next 12 months, with only 13 percent expecting it to improve. (This is the most negative reading since the survey began four quarters ago.)

When it comes to the recent Autumn Statement by the UK Chancellor, over 70 per cent believe it will have a negative (27 percent) or no (48 percent) impact on their organisation, whilst just 4 percent believe it will have a positive impact.

In relation to funding from government sources, one quarter (24 percent) of respondents said that their organisation had seen a reduction during the fourth quarter of the year. 66 percent said they had seen no change, whilst 12 percent said that they experienced an increase.

Ulster Bank Chief Economist, NI, Richard Ramsey, says: “We are seeing a continuing trend of more third sector organisations experiencing a reduction in funding from government sources than those seeing an increase; something that was evident throughout 2016. Indeed, in 2017 budgetary pressures are likely to intensify. With the Northern Ireland Finance Minister set to announce his delayed Budget this month, this will more than likely mean further rounds of funding cuts for third sector organisations.”

“However, in this environment, we are still seeing pragmatism in the sector, with a significant proportion of leaders prepared to agree with proposals for rating of charity shops in some form as long as there is a commitment to direct the revenue raised into supporting entrepreneurship in the sector.

“Perhaps unsurprisingly, third sector leaders - whose organisations account for a sizeable portion of the economy - are pessimistic about the prospects for economic conditions in Northern Ireland during 2017, with almost two-thirds expecting the economy to deteriorate. Indeed, with Brexit looming on the horizon, along with other challenges such as rising inflation and the continuing fragility of the public finances, our own view is that the Northern Ireland economy is likely to stagnate this year.”

Nora Smith, chief executive of CO3, says: “2017 will undoubtedly present challenges and opportunities for the third sector. The increase in demand for services points to the need to increase the level of investment into the sector.  Political uncertainty and the lack of clarity surrounding Brexit points to the need for strong leadership.”

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About the survey

The Ulster Bank & CO3 3rd Sector Index is a barometer of Northern Ireland’s third sector, involving a quarterly survey of CO3 members who include the leaders of some of Northern Ireland’s largest charities and social enterprises through to small community groups. The survey is sponsored by Ulster Bank and carried out by Perceptive Insight, based on an online survey of almost 200 leaders of third sector organisations.

Click to view the full Ulster Bank & CO3 3rd Sector Index.

Click to download the 3rd Sector Index Infographic.