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What Brexit Means for Our Sector and the UK

Tuesday, 05 July 2016 09:59


Even though it is a time of uncertainty for us all, it would be remiss of us not to make some comment about this truly monumental decision, we’ve gathered some opinions and added a few of our own.

The National Council for Voluntary Organisations (NCVO) has warned that the financial implications of the UK’s Brexit vote will affect the voluntary sector more in the long term – and be under-estimated - than in the immediate future, stating that the short-term hits to charities’ income are unlikely.

In the long-run, we at the FRN believe Brexit might result in reduced income for the sector because grant-making foundations rely on investment income; income that may well be in jeopardy if markets remain nervous and the UK’s economic standing diminishes. Credit ratings agency Standard & Poor had been the only major agency to maintain an AAA credit rating for the UK. It has now cut its rating by two notches to AA.

NCVO also predicts that the government will maintain EU regulation for at least the next two years and probably for much longer. What this means for EU-funded programmes remains unclear. The charity chief executives body Acevo is calling for an urgent summit with the Leave camp over how they will replace the estimated £308million per annum direct funding from the EU of which the voluntary sector will/might lose. 

NCVO adds that there is likely to be a slowdown in wider government business for months if not years, meaning there will be less progress on charities’ policy areas.

And it calls on charities and community groups to consider their role in "healing divisive referendum campaign wounds".

As Debra Allcock Tyler from the Directory of Social Change said, the sector must stay united. "Divided votes can divide nations. As charities we must make sure that we don’t allow politics to divide us. We must focus on our beneficiaries. We must lead by example and demonstrate compassion and understanding to those who think differently to us. That is what makes us special." Hear, hear!

Social Enterprise UK has expressed concern over a potential "knee-jerk reaction from the state, banks and big business". In a statement, the organisation's chief executive, Peter Holbrook, said: "We want to avoid social enterprises facing the pinch by a combination of a freeze on public sector contracts, banks using the decision as an excuse not to lend money, and for-private profit businesses seeking to keep their balance sheets looking good by squeezing their suppliers. There is no blueprint for Brexit. No country has ever left the EU, so we have no real idea just how bumpy a ride the economy is in for."

New Philanthropy Capital has warned of the 'drying-up' of public funding for the sector. Its chief executive Danny Corry said: "The Brexit vote means we are entering a period of uncertainty for charities. The government will now be tied up for months negotiating what happens next, sucking time and energy away from making sure charities are in the best position to make a social impact. With news that the Prime Minister is stepping aside his Life Chances agenda in which charities have been promised a central role, will be one thing that loses out. If the UK hits economic trouble as a result of Brexit - as the ‘In’ side long argued - this will mean sources of public funding drying-up even further."

George Osborne announced last week that his ambition to achieve budget surplus by 2020 is no longer achievable. Does this mean more budget cuts or a relaxation of austere budgetary targets in order to stimulate investment, jobs, growth in communities?

In addition, the much-respected Resolution Foundation think-tank called for a rethink of the £12bn cuts to working-age welfare scheduled to take place during this parliament. The truth is, the dust is nowhere near settling and we don’t know what impact Brexit will have on the re-use sector. But, we’ve faced major challenges in the past and we’ll face major challenges in the future. We’re strong and resilient. We’re nimble. We’re flexible. We’re innovative. And to coin a well-used but strangely silent soundbite these days, `we’re all in this together’.

Be rest assured that FRN will be navigating the sector through this new landscape; collaborating, influencing and leading, to benefit you and the individuals and communities you serve.

Read 2504 times Last modified on Tuesday, 05 July 2016 14:20

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