Charities and Brexit: Regardless of the outcome, preparation is key

Today NCVO has published guidance to help charities prepare for a no-deal Brexit. Despite a tumultuous few days in parliament, it is vital that charities are thinking about the implications of any Brexit scenario, including no-deal, and putting measures in place that are flexible and resilient. To accompany the guidance, we will today be hosting a webinar, in conjunction with the Department for Digital, Culture, Media and Sport (DCMS) and the Home Office, discussing ways in which civil society organisations can prepare for a no-deal exit.

In the last few days, parliament has passed legislation that mandates the prime minister to request a Brexit extension if MPs have not approved a withdrawal agreement by 19 October. Any extension must be approved by all 27 EU member states (which is not guaranteed), and the prime minister has vowed that we will not seek one, even though this could lead to court action against his government. So while a no-deal at the end of October is now less likely, it cannot be ruled out.

NCVO has been vocal about the dangers of a no-deal Brexit. Whatever the outcome of the current political uncertainty, charities must act now.

The major areas where charities might be affected

Our guidance highlights several areas where charities must look at their operations and identify pressure points in a no-deal scenario. We have produced a list of actions for each of these that organisations may wish to consider when making operational decisions. Although our guide discusses several more issues, here we have highlighted the three principal areas of concern.

Economic Impact

The Office for Budget Responsibility, the International Monetary Fund and the Bank of England have all published economic forecasts which point to downturn, slower growth and in some cases recession. A period of economic hardship looks likely in the event of a no-deal Brexit. We have seen in the past that such circumstances produce increased need, and the work of voluntary organisations and charities becomes all the more important.

Consequences include a weakened pound, increased inflation, rising prices and disruption to supply chains could all impact on the work carried out by a range of charities.

Funding

With EU funding to the sector estimated to be worth around £258m annually, a cliff-edge exit from the EU could have serious implications for charity finances in the UK. The government has pledged that it will cover the cost of all EU-funded projects until the end of 2020. But with no consultation scheduled on the shared prosperity fund and Westminster in shutdown, there is no certainty around what may happen to charity funding at the end of 2020.

NCVO has consistently called on government to push ahead with the UK shared prosperity fund to ensure continuity and assurances for charities in a no-deal scenario.

Workforce

There remains a great deal of uncertainty around the status of EU nationals. The EU settlement scheme will grant EU nationals already resident in the UK indefinite leave to remain with the same rights they currently enjoy, if their applications are successful.

However, new immigration proposals would prevent over 80% of EU nationals currently working in charities from working permanently in the UK, according to research from the Institute for Public Policy Research. With EU nationals concentrated in high numbers in sectors such as health and social care charities, the lack of certainty produced by a no-deal exit is of concern to charities to work with or benefit from the work of EU nationals.

Charities must be prepared

Whatever the outcome of the ongoing Brexit confusion, the most important consideration for all organisations is to be prepared for any scenario. NCVO will continue to work alongside our members, providing advice and support where necessary to ensure that civil society can continue its work regardless of political developments. What is vital is that organisations are thinking now about what they can do to prepare and working together to ensure that our voices are heard and our goals achieved.

 

NVCO/Bates Wells Trustee Conference 2019

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Ben Westerman Ben Westerman is a senior external relations officer at NCVO, leading on Brexit work.

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