Charities to lose nearly £250m after Brexit

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Research has put a figure on how much charities will suffer from funding cuts following Brexit, but researchers admit true amount could be much more

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21st November 2017 by Susan Smith 0 Comments

UK charities will lose at least £258.4 million in European funding because of Brexit.

New research from the Directory of Social Change (DSC) has identified the figure and found beneficiaries of charities working in areas like overseas aid, research and conservation will likely be hardest hit. It is calling on UK government to act swiftly to replace these funds.

Strong disparities in the distribution of funds across the UK home nations means that the impact will vary significantly across regions. Rural areas, for example, tend to have benefitted more from European funding. 

However, because funds are distributed by intermediary agencies in the UK, the DSC has said working out the exact amout of funding likely to be lost is difficult. It says the full amount is likely to be considerably higher than its current figure suggests.

Although Brexit negotiations are moving sluggishly forward, it could be less than two years until the UK leaves the EU, and with it the EU's institutional funding streams, mainly the European Structural and Investment Funds. A no deal Brexit could lead to an even sharper shock to the system, if currently awarded funds are suddenly cut off overnight.

Launching the report, DSC co-author Daniel Ferrell-Schweppenstedde said: “It's nearly 2018 but the future of EU funding after Brexit remains extremely murky. Government needs to clarify the situation urgently, because uncertainty is already affecting budgetary outlooks for many charities across the sector.

“Trustees and executives are being left in limbo, not knowing the future of current funding and needing to find alternatives which are thin on the ground. As funding plans which looked secure for years threaten to dissolve almost overnight, the threat of disruption to vital services grows day by day.”

Despite these clear risks, charities are not even among the 58 sectors that have been consulted on the potential impact of Brexit. And so far, the government has made only vague and piecemeal statements about the future of EU funds.

Speaking about the government’s failure to engage the third sector over Brexit, John Downie, director of public affairs at the Scottish Council for Voluntary Organisations, said recently: “Once again the UK government has shown its absolute unthinking contempt for the third sector. 

“SCVO is working closely with our members and the Scottish Government to gauge the potential impact of Brexit on the third sector in Scotland. It is crucial that the UK Government recognises how vital our sector’s work is and it is high time it involved us in these discussions.”

In 2016 HM Treasury pledged to continue to support projects which are agreed up to the point at which the UK departs the EU, subject to being value for money and in line with government's priorities.

The 2017 Conservative Party manifesto also promised to use EU funds that come back to the UK after Brexit to create a Shared Prosperity Fund. What priorities such a fund would have, what causes it would support and how it would function remains totally unclear.

DSC argues that some simple steps could be taken right now to provide charity trustees with clarity, to help them plan effectively.

It is calling on the government to clarify the level of funding for charities that will be maintained throughout the Brexit process, provide a credible commitment on how EU funding will be replaced after the UK’s departure from the EU, and begin consulting with the charity sector on the potential UK Shared Prosperity Fund.