Across the charity sector, trustees, volunteers and staff are increasingly worried about the looming impact of Brexit.
UK charities risk losing at least £258m in EU funds because of Brexit, including the loss of EU funding streams such as European Structural Fund (ESF), which, together with the European Regional Development Fund, makes up the bulk of the EU structural and investment funds programme, which by 2020 will have invested some €11.8bn in the UK since 2014.
The loss of £258m would be alarming in itself, but the full amount is likely to be far higher. Funds are often distributed by intermediary agencies in the UK, making comprehensive data difficult to analyse, but even this baseline number would equate to the loss of about 10% of all annual foundation grants, or half of what the Big Lottery Fund distributes each year.
That hit will be disproportionately felt across charities and causes in the UK. Our research estimates that of the £258.4m received in 2015, charities based in England received £229.76m of the total. Those based in Scotland received £26.11m, Northern Ireland got £1.37m and Welsh charities got £1.17m. In England, the bulk of funding goes to three areas: charities working in international development and humanitarian aid (£125m in 2015), research (£59m) and natural and historical conservation (£35m).
Hundreds of organisations stand to lose out, including the Prince’s Trust which has used EU funding to help thousands of young entrepreneurs. The Francis Crick Institute, the Beatson Institute for Cancer Research and the Institute of Food Research have all received funding for critical research.
Other organisations, all delivering vital projects, that stand to be affected include Save the Children, the British Council, the Royal Society of Wildlife Trusts (and other countless wildlife trusts around the country), and the Woodland Trust as well as the Scottish Association for Marine Science, the Merseyside Youth Association, and even the National Botanic Garden of Wales.
Replacing EU funding after Brexit won’t be simple. Real alternatives are thin on the ground.
Many organisations have already spoken out. Umbrella bodies including the National Council for Voluntary Organsations, and UK Community Foundations have already called on the government to use the money it has previously contributed to the ESF to create a new funding stream. Others have urged the government to ensure that EU funding is replaced from 2019 onwards, by using the £1bn of dormant assets identified by the Dormant Assets Commission.
So far, there has been little to suggest the government has a plan to protect the voluntary industry against this shortfall. 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 piecemeal statements about the future of EU funds.
In 2016, following the EU referendum, the Treasury pledged to continue to support projects agreed up to the point at which the UK departs the EU – subject to being “value for money” and “in line with government’s strategic priorities”. What this means in practical terms is anyone’s guess.
More recently there was a pledge in the 2017 Conservative party manifesto to use the money saved after Britain leaves the EU to create a shared prosperity fund. But we’re still waiting for the details.
As the clock continues to tick towards the Brexit deadline, the future of EU funding – for all sectors– remains murky. The government could and should provide a commitment on howEU funds will be replaced in full after the transition. It could and should consult communities on how a UK shared prosperity fund will operate.
If the Brexiteers promise to “take back control” after the EU referendum is going to mean something, surely there should be greater decisiveness in how taxpayers’ money will be used to make a difference in society?
This is beyond charities. It is about putting communities in charge and boosting their resilience to decide their own futures. It’s time we started asking ministers and MPs hard questions to hold them to account. The current state of affairs just isn’t good enough.
- Daniel Ferrell-Schweppenstedde is the policy and public affairs manager, Directory of Social Change. Researcher Christy Cooney also contributed to this article.