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| Version 1 | Version 2 |
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| Charities and Brexit: where are we now? | |
| (2 days later) | |
| It’s been eight months since the fateful referendum and we are now starting to see a slightly clearer picture of what to expect from Brexit and how charities fit into the equation. | It’s been eight months since the fateful referendum and we are now starting to see a slightly clearer picture of what to expect from Brexit and how charities fit into the equation. |
| What do we know? | What do we know? |
| The government’s negotiating strategy has become clearer – we’re going for a hard Brexit, withdrawing from the single market and imposing still-undefined controls on immigration from the EU. The process is also clearer – the supreme court has determined that MPs must approve the triggering of article 50, which means legislation will be needed, and a white paper is on the way so there are opportunities here for charities to engage in debate and highlight issues important to their beneficiaries. | The government’s negotiating strategy has become clearer – we’re going for a hard Brexit, withdrawing from the single market and imposing still-undefined controls on immigration from the EU. The process is also clearer – the supreme court has determined that MPs must approve the triggering of article 50, which means legislation will be needed, and a white paper is on the way so there are opportunities here for charities to engage in debate and highlight issues important to their beneficiaries. |
| The major slump feared before the referendum has not yet materialised but forecasts of growth are low and the government’s own estimates put the Treasury’s coffers £122bn poorer by 2020 than was forecast last March. The likelihood is that this will see services cut, hitting the poorest and most vulnerable disproportionately. This will translate into more pressure on charity services. | The major slump feared before the referendum has not yet materialised but forecasts of growth are low and the government’s own estimates put the Treasury’s coffers £122bn poorer by 2020 than was forecast last March. The likelihood is that this will see services cut, hitting the poorest and most vulnerable disproportionately. This will translate into more pressure on charity services. |
| Future of funding | Future of funding |
| The fate of EU-funded projects remains a key concern for many charities. Following the referendum result, Chancellor Philip Hammond pledged to underwrite EU-funded projects that are signed-off before Britain leaves the EU. | The fate of EU-funded projects remains a key concern for many charities. Following the referendum result, Chancellor Philip Hammond pledged to underwrite EU-funded projects that are signed-off before Britain leaves the EU. |
| However, his guarantees are not backed up by any legislation or formal policy. Despite his public assurances, funding that is directly administered by EU institutions could be most under threat immediately after Brexit happens. This is because the UK government has not been involved in the process of distributing these funds. Our preliminary research indicates that in 2015 £189.9m was paid directly to UK charities by the European commission. | However, his guarantees are not backed up by any legislation or formal policy. Despite his public assurances, funding that is directly administered by EU institutions could be most under threat immediately after Brexit happens. This is because the UK government has not been involved in the process of distributing these funds. Our preliminary research indicates that in 2015 £189.9m was paid directly to UK charities by the European commission. |
| The government has also asserted that it will only honour/replace EU funding for projects that are judged to be “good value for money” and “in line with domestic strategic priorities” – which leaves plenty of wiggle room to recant on the guarantees. | The government has also asserted that it will only honour/replace EU funding for projects that are judged to be “good value for money” and “in line with domestic strategic priorities” – which leaves plenty of wiggle room to recant on the guarantees. |
| Both of these conditions could prove problematic for charities funded by current EU programmes. Demonstrating value for money on charitable projects is already difficult, and could become more so. Funding programmes that currently align with EU values and policy interests could change to be more closely aligned with the policy interests of the UK government of the day, which might not be in charitable beneficiaries’ best interests. | Both of these conditions could prove problematic for charities funded by current EU programmes. Demonstrating value for money on charitable projects is already difficult, and could become more so. Funding programmes that currently align with EU values and policy interests could change to be more closely aligned with the policy interests of the UK government of the day, which might not be in charitable beneficiaries’ best interests. |
| This means that charities currently in receipt of EU funding, or those which were considering applying, may have to consider changing tack and some may find it more difficult to convince the government of their value for money and relevance to the UK government’s policy priorities. | This means that charities currently in receipt of EU funding, or those which were considering applying, may have to consider changing tack and some may find it more difficult to convince the government of their value for money and relevance to the UK government’s policy priorities. |
| There are wider questions as to whether these new criteria will be applied across future government funding of voluntary and community sector organisations. Charities with no stake in EU funding may find themselves having to jump through even greater hoops to secure government funding. | There are wider questions as to whether these new criteria will be applied across future government funding of voluntary and community sector organisations. Charities with no stake in EU funding may find themselves having to jump through even greater hoops to secure government funding. |
| How to respond | How to respond |
| A lot will be revealed over the next few months. We may learn more about the government’s negotiating priorities and with it get a better understanding of what its policy objectives will be. Charities will need to keep themselves informed. | A lot will be revealed over the next few months. We may learn more about the government’s negotiating priorities and with it get a better understanding of what its policy objectives will be. Charities will need to keep themselves informed. |
| The biggest challenge (and potentially the greatest impact) for the sector in the next phase may not be what happens to the money, but the myriad and complex policy shifts. Brexit may affect areas as diverse as policy for refugees and asylum seekers, the environment, human rights, tax and VAT, and fundraising across EU member states. | The biggest challenge (and potentially the greatest impact) for the sector in the next phase may not be what happens to the money, but the myriad and complex policy shifts. Brexit may affect areas as diverse as policy for refugees and asylum seekers, the environment, human rights, tax and VAT, and fundraising across EU member states. |
| Brexit will not affect all charities equally, and some parts of the sector will face greater challenges. We know that Theresa May’s government is seeking controls on immigration. The migrant, refugee and asylum charity sub-sector may find it more difficult to get the political and financial support they need to help their beneficiaries. | Brexit will not affect all charities equally, and some parts of the sector will face greater challenges. We know that Theresa May’s government is seeking controls on immigration. The migrant, refugee and asylum charity sub-sector may find it more difficult to get the political and financial support they need to help their beneficiaries. |
| The government’s objectives with regard to other policy areas of high interest to the voluntary sector are perhaps less known. As the Brexit negotiations unfold it is vital that charities keep themselves informed of what stance the government is taking and finding out what it means for their beneficiaries. | The government’s objectives with regard to other policy areas of high interest to the voluntary sector are perhaps less known. As the Brexit negotiations unfold it is vital that charities keep themselves informed of what stance the government is taking and finding out what it means for their beneficiaries. |
| Individually and collectively, charities will need to find ways to influence the Brexit process to ensure that Brexit means positive not negative outcomes for themselves and their beneficiaries. Staying informed and speaking up on behalf of beneficiaries will be crucial. | Individually and collectively, charities will need to find ways to influence the Brexit process to ensure that Brexit means positive not negative outcomes for themselves and their beneficiaries. Staying informed and speaking up on behalf of beneficiaries will be crucial. |
| Christy Cooney is a researcher at the Directory for Social Change and Ciaran Price is policy officer. | Christy Cooney is a researcher at the Directory for Social Change and Ciaran Price is policy officer. |
| Talk to us on Twitter via @Gdnvoluntary and join our community for your free Guardian Voluntary Sector monthly newsletter, with analysis and opinion sent direct to you on the first Thursday of the month. | Talk to us on Twitter via @Gdnvoluntary and join our community for your free Guardian Voluntary Sector monthly newsletter, with analysis and opinion sent direct to you on the first Thursday of the month. |