Charities risk losing over £250m through Brexit

UK charities could lose over £250 million in EU funds because of Brexit, new research has revealed.

Research from the Directory of Social Change has found £258.4m could be at risk through Brexit, although the full amount could be "far higher" due to the way many funds are distributed by intermediary agencies in the UK, making comprehensive data difficult to obtain and analyse.

The research revealed the beneficiaries of “hundreds of charities” working in particular sub-sectors like overseas aid, research and conservation will likely be hardest hit, “unless the UK government acts swiftly to replace these funds”.

It also found “strong disparities” in the distribution of funds across the UK home nations means the impact will also vary significantly across regions.

“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,” the Directory of Social Change said.

“A ‘no deal’ Brexit could lead to an even sharper shock to the system, if currently awarded funds are suddenly cut off overnight.”

However, it claimed that despite the risks, charities are not 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,” it added.

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’.

Launching the report today, 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.”