Brexit Will Impact On Charities And Consequently On Communities

The Government seemingly has not undertaken the 58 or so sector impact assessments that it once spoke about. This is an incredible failure of government. How can decisions be taken, and options evaluated without such data and evidence?

Even had any of the 58 or so phantom assessments being undertaken they would not have included a very important element of the UK social economy – the charity, and voluntary and community sector. This sector employed over 850,000 people and had a turnover in excess of £45bn last year. The NCVO estimates that estimate that the voluntary sector contributes £11.1 billion to UK gross value added, equivalent to 0.8% of the whole of the UK GVA. The voluntary sector contributes to the UK economy comparable to other sectors: for example, the GVA of agriculture was £8.3 billion in 2010.

Not to have undertaken an assessment of Brexit on the charity and voluntary and community sectors is a serious omission.

The sector will be affected in various ways and most of these are potentially very damaging to those who rely on it services in areas such as social care.

The Directory of Social Change has estimated that the sector is at risk losing at least £258.4m in EU funds because of Brexit and that the full amount is likely to be far higher due to the way many funds are distributed by intermediary agencies. This £258m matters as it is spent on services, community development, environmental protection, public education and supporting some of the most vulnerable people in society. It is not money for charity administration.

The Government has not indicated that it will make good this loss of funding or if it were to do so from where it would find the money. If this is lost and not replaced by the Government the public will be the losers.

The VODG group of charities which works with and for people with disabilities has expressed that there are serious concerns about the future of programmes and services for people with disabilities. It also points out that because most service providing VCS organisations rely on public funding there is widespread concern that further expenditure cuts post-Brexit will leave the key services such as social care, residential and rehabilitation services in much deeper crisis. As we know these services are already in serious financial difficulty.

VODG draws attention to some critical workforce issues which Brexit creates for care and other services. The health and social care system is very dependent on workers from across the EU. There are serious concerns that some of these workers are already leaving their UK homes and others are not seeking to come in the same numbers as before the EU Referendum. This is before any restrictions on the movement of people. Consequently, there are “very serious concerns about the retention of existing EU nationals and securing the future supply.” VODG cautions that uncertainty within the labour market following the result could reduce providers’ abilities to recruit. It also emphasises that, in the longer term, there are broader workforce planning requirements necessary to ensure an adequate pool of skilled and caring staff in the future.

The VODG report like many others commissioned and published by VCS organisations raises a series of concerns about a set of issues relating to community cohesion and rights. The risks highlighted include social divisions in society, reductions in community cohesion and losing progressive approaches to disability rights. In addition, concerns are raised about distraction to the raft of domestic issues that voluntary disability organisations urgently need Government and policy makers to address.

The Charities Finance Group has suggested in a report earlier in the year that there could be benefits for the VCS and charities more generally from Brexit. It cites the opportunity that Brexit could provide for reforming public procurement regulations and placing a greater emphasis on social value and social outcomes and less on price and competition. Much of this is already possible under the EU regulations and if the UK is going to be subject to EU Single Market rules until at least 2021 it will have to retain these EU public procurement rules. If post-2021 the UK wishes to be aligned to EU regulatory systems, this could continue for some time longer. However, it is important that a comprehensive analysis of the impact of Brexit on public sector commissioning and procurement is undertaken.

Many charities and VCS organisations concerned with issues ranging from the environment to animal welfare to employment conditions to international aid to human rights will be concerned about the implications of Brexit on their beneficiaries and their organisations.

The absence of any comprehensive assessment of Brexit on the voluntary and community sector and the services it undertakes on behalf of communities across the country is putting those communities, and often some of the most vulnerable members of society at risk. I have seen no serious comments let alone analysis from DCMS or the Department for Exiting the EU.

The Government should act and undertake such an assessment but if it won’t do the national sector leaders such as NCVO, ACEVO, NAVCA and others should

  • press the Government to undertake a sectoral assessment of the impact of Brexit on charities and the VCS and consequently on public well-being and the public sector itself
  • press the relevant Parliamentary select committees to do the same
  • failing the above jointly commission their own assessments for the sector, and for the services and areas of interest and involvement
  • demand that the VCS is fully involved in the preparation and briefing for the next stages of Brexit negotiations
  • be willing to speak out against policies and potential agreements that might be damaging to the sector, its beneficiaries and society
  • not assume that Brexit is a certainty so not feel obliged to support the Government line if this is not in the interests of the sector’s beneficiaries and society
  • actively engaged in the Brexit debate using evidence and speaking on behalf of communities and beneficiaries

Brexit, if it happens, will have a profound impact on our social, economic and environmental future. Charities and the VCS are all about challenging injustice, social exclusion and inequality as well as economic and environmental policies and practices that are harmful and unsustainable. They also play a vital role in addressing against hardship, injustice and specialist needs. If they are unable to play this role post-Brexit there will be even greater demand on the beleaguered public sector.

Therefore there is an urgent need for some serious analysis and evidence on what Brexit might mean for charities, VCS, the public sector and more importantly for their beneficiaries and communities.