Written evidence submitted by the International Centre for Life Trust

 

 

 

Digital, Culture, Media and Sport Commons Select Committee
Inquiry into Impact of Covid-19 on the charity sector
 

Summary

 

The scale and timing of the COVID-19 crisis is impacting on income and cashflow which, when combined with the annual Gift-Aid deadline, presents an existential risk to our charity. Our charitable activities have been severely curtailed and will be impacted beyond the duration of the lockdown.

 

 

Details

 

  1. The International Centre for Life Trust is an educational charity (Charity No. 1059607) that operates a public science centre located in the heart of Newcastle upon Tyne. Our ambition is to create the most job ready, skills rich, young population in the UK, ensuring that the young people of the North East are confident, have high aspirations, and are ready to thrive in a changing world.

 

  1. At the same time, we support world-class medical research and health treatment by providing laboratories, clinics, and other facilities at well-below market rates to Newcastle University and the NHS, equating to a subsidy of around £610,000 per year. This creates a unique ‘science village’ in city centre that has operated successfully for 20 years.

 

  1. We wish to alert the committee to the impact the COVID-19 crisis is having on our organisation, and others like us.

 

  1. Life prides itself on its financial management, with a diverse business model based upon multiple commercial income streams to support its core mission. As well as ticket income from paying guests, we operate a conference centre, a car park and lease premises to commercial tenants as well as Newcastle University and the NHS. This commercial income is earned by our subsidiary trading company, ICFL Property, which pays its taxable profits to the parent Trust via Gift Aid.

 

  1. In our 20-year history, Life has operated without any recurring public funding. COVID-19 presents a unique situation where all these sources of income are under severe pressure, with many falling to zero.

 

  1. Our commercial tenants operate hospitality businesses (bars and nightclubs), so have had to close until further notice. This sector has been severely hit and it is expected that their closure will be for a longer period than other areas of business. The tenants have been provided with some limited respite on rent by the government; there have however been no such measures put in place for landlords. Income from these units is currently zero and this will continue for the foreseeable future. There is also inevitably a real question mark as to whether these businesses survive this crisis and the consequent financial impact this could have on Life.

 

  1. In order to maximise the charitable income to the Trust, ICFL Property pays gift-aid to the Trust by the annual deadline of 31st December. This year’s payment will be based on the profits generated in the 2019-20 financial year, but the subsequent collapse in revenue means that the usual cashflow to make these payments is not present. This creates a ‘perfect storm’ of no revenue combined with high levels of gift aid payments in the same year, risking the viability of the charity. This will be a common fear within the charity sector, which could be alleviated by extending the deadline for Gift-Aid payments by 6-12 months to allow incomes to recover.

 

  1. In the meantime, Life has furloughed the majority of its operational staff, taking advantage of the government’s salary support scheme. We will make use of the government’s continuity business loans to meet our commitments in the short to medium term.

 

  1. Uncertainty around the duration of the closure, the viability of our commercial tenants and the rate at which business and customer activity will resume, make planning for the medium to long-term impossible.