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Brexit - Impact on the third sector

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Thu, 01/12/2016

Since the outcome of the EU referendum to leave the EU, there has been varying views on what the impact of Brexit will be on the economy and future of the UK. It’s clear though that whatever the views presented there continues to remain an uncertainty as to how this will affect us all.

This lack of certainty applies to the Third Sector.  NCVO provided a briefing in July that has warned that in the short term the impact of Brexit in the short term would probably be overestimated, but the longer term impact would be likely to be underestimated. Since then NCVO has produced a second briefing in November. The Government has announced that it will trigger article 50 by the end of March 2017, although this could also happen as early as January. While Theresa May has repeatedly said that 'Brexit means Brexit', the government has so far held back details on what it is aiming to achieve. It seems less and less likely however that we will have a 'soft Brexit', which would ensure the UK's continued access to the single market.

The Government has greated the Department for Exiting the EU (DExEU) and key roles on both sides of the negotiating table have been appointed.

The new department is responsible for co-ordinating the work that does into the negotiations and the withdrawal process, and engages with other departments and different stakeholders to do so. Leave campaigners David Davis, who is the new Secretary of State for Exiting the EU, Boris Johnson and Liam Fox will be among the key players in the withdrawal process.

Comments from key figures on the EU side suggest that the EU will take a firm stand in the negotiations, with Guy Verhofastadt, lead negotiators for the EU Parliament, emphasising the link between a country's access to the single market and its willingness to accept freedom of movement..

Short term charities and charitable trusts may experience an impact on their invested income, which will affect the resources available to support services to clients.

Longer term, it remains unclear which of the EU regulations will be maintained by Government and this could have an impact on the progress of legislation and charity regulations.

According to research published by the Association of Chief Executives of Voluntary Organisations (Acevo). A survey of its members in the aftermath of the Brexit vote shows charity chief executives, representing more than 3,000 employees and 15,000 volunteers, are increasingly worried about the future.

A recent Guardian article stated that UK charities typically receive more than £200m a year in total in EU structural funds through the regional development fund and the social fund. In addition they can access EU money earmarked to help people in deprived areas take their first steps out of poverty and social exclusion and to provide extra support for young people aged under 25 living in regions where youth unemployment was higher than 25% in 2012. The West Midlands has greatly benefited from EU Funds over the years.  It remains unclear for charities across the UK, from social welfare voluntary organisations to international aid agencies, as to whether they can still apply for EU funding, even though the government has not yet started to negotiate the terms of its exit from the EU.