9 August, 2019
As we edge closer to October 31, a no-deal Brexit is firmly on the cards. Such a scenario would likely cause significant challenges to charities, both in terms of the potential economic impact, and charities’ role in addressing issues that arise as a result.
Last week, a coalition of national charities including the Trussell Trust and the Felix Project wrote to the Secretary of State for Work and Pensions Amber Rudd, expressing concern about the impact of a no-deal on people on low incomes. These frontline agencies fear a rise in food prices and a lack of donations as a result of economic uncertainty, will leave them struggling to support societies’ most vulnerable.
Although wider challenges to the sector are difficult to predict, we can make some assumptions about how a no-deal Brexit might impact UK charities.
Several UK humanitarian aid charities are dependent on European funding. In 2017, the European Civil Protection and Humanitarian Aid Operations (ECHO) awarded 122 contracts to UK charities worth a total of over £225m. Oxfam, the International Medical Corps UK and International Rescue Committee UK are among the charities which each currently receive tens of millions of pounds through these contracts. In the event of a no-deal, the ECHO has confirmed that existing contracts would be cancelled. Although the Department for International Development (DfID) has agreed to fund UK organisations receiving ECHO funding for bids that were approved from 23 August 2018 until 29 March 2019, for the duration of their implementation, the loss of funding will likely have a devastating impact on these charities in the long term.
A no-deal Brexit produces ambiguity surrounding the status and rights of EU citizens living and working in the UK. Currently, around 4-6% of staff working for charities in the UK are EU nationals. A recent report from the Institute for Public Policy Research (IPPR) suggests that charities could lose 25,000 staff after Brexit, with little ability to replace them or insufficient resources to train replacements.
Charities have been at the forefront of arguing for protections across several areas, many of which have been strengthened through EU legislation. A no-deal scenario threatens regression on the UK’s environmental, social and labour standards. For instance, exiting without a deal would mean the UK severing its relationship with the European Court of Justice. As such, its participation in the EU Emissions Trading Scheme (ETS) would end. Exclusion from EU agencies like the European Chemicals Agency, would also mean the UK loses access to safety information for thousands of harmful chemicals. Maintaining these commitments is vital to the rights of the people and communities that charities work amongst, yet no such guarantees have been provided by the Government in the event of a no-deal.
The Government must come forward with proposals to support the charity sector in the event of a no-deal Brexit. In their letter to Amber Rudd, the frontline agencies called for the Government’s commitment to a hardship fund that would make cash grants to guarantee adequate food for the period of disruption. This is a start, but wider contingency plans to deal with staff shortages and uphold existing rights and standards are necessary to protect the long-term integrity of the sector. Whatever the outcome in October, the charity sector will have to work hard to overcome the challenges Brexit will throw at it and close cooperation between the charity and public sectors will be needed more than ever.