Brown ponders solution to charities' lost £200m

Prime Minister Gordon Brown says he is considering a number of measures to protect the voluntary sector in the wake of the potential loss by charities of up to £200m in collapsed Icelandic banks.

Brown was responding to a question during Prime Minister's Questions from Nick Hurd, the shadow charities minister. Hurd asked: "Will the Government introduce measures to support that vital sector before it has to start cutting services to the people most vulnerable to a deep recession?"

Brown replied that he also wanted to help charities and cited Gift Aid and "substantial money to work in partnership" as examples of Government initiatives.

"We will consider anything that helps to protect the charitable sector, and we are already considering a number of measures through which to do so," he said.

However, a spokesman for the Prime Minister was unwilling to elaborate on what the measures might be. "We will make an announcement at the appropriate time," he said.

Chancellor Alistair Darling yesterday announced that the Treasury was to lend the Financial Services Compensation Scheme £800m to allow it to refund savers who had lost money through the collapse of Icesave, the online division of the Landsbanki bank. However, charities qualify for the compensation scheme - which normally refunds up to £50,000 of lost savings - only if they fall below certain financial thresholds.

A spokesman for the Charities Aid Foundation said: "The outcome for charities that fall outside of this definition has yet to be decided."

He said that uncertainty had been raised by a group of umbrella bodies, including CAF, when it met Treasury officials last week (Third Sector Online, 29 October).

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