Payroll giving to be overhauled

Responding to the fact that only 2% of employers offer payroll giving and only around 3% of employees are making regular donations, the government launched a consultation at the beginning of the year on proposals to increase the number of people signing up by simplifying the scheme’s administration and making it easier for donors to give.

In its response to the consultation, the government committed to:

• reducing the processing time for donations from 60 to 35 days
• providing more information about the scheme on the gov.uk website for donors, employers, charities and payroll-giving agencies
• introducing service level agreements between charities and payroll-giving agencies.

It is also planning to host a series of working groups, involving charities, payroll giving agencies and other stakeholders, to help payroll giving agencies and charities consider further improvements to the payroll giving process.

However, plans to allow commercial companies to become agencies have been scrapped, and it has been confirmed that the government will not make offering schemes mandatory for employers.

Minister for Civil Society Nick Hurd said: “These are useful steps in making payroll giving work better for donors, employers and charities. They are part of our broader strategy to make it more compelling to give.”

Craig Duncan, finance director at Help the Hospices and a member of the Payroll Giving Forum, said: “Help the Hospices, along with other charities, has long been calling for substantial reform of the payroll giving scheme so we are pleased the government has committed to change the current framework to help make it simpler and quicker for people to give via their employers.

“Measures such as introducing a standardised agreement between charities and payroll giving agencies will make a big difference to the way the system operates.

“Also, we are delighted the government is showing strong leadership on this issue by raising awareness about payroll giving among employers and actively encouraging organisations to adopt the scheme.

“The government now needs to work closely with charities to ensure these measures are successfully implemented to help encourage more people to give through payroll giving.”

However, reaction from the charity sector hasn’t been all positive, with some suggesting the proposals don’t go far enough, while others expressed disappointment that the government has missed a vital opportunity to make the changes needed.