Charities ‘to lose £200m in European cash after Brexit’

Parliament: EU funding major source of revenue, peers told

Charities which are “the lifeblood of society” are expected to lose £200million in European Union funding after Brexit, a parliamentary committee has warned.

The House of Lords Committee on Charities said innovative small charities could be the worst hit as they are already under financial pressure.

It said public bodies

“Small charities under pressure could be the worst hit”

must recognise their importance with grants to test new ideas and by avoiding overly prescriptive contracts for services.

Charities receive the EU money from structural and investment funds, in particular the European social fund (ESF), and must get more support with funding to meet core costs, the peers said.

In evidence to the committee, the Royal Mencap Society described the ESF as a “major source of revenue” to help raise living standards and provide job opportunities for young people and the long-term unemployed.

Medical research charities raised concerns about losing EU funding and opportunities for collaboration after Brexit, such as through the Horizon 2020 innovation programme.

Civil society minister Rob Wilson told the committee the government was listening to charities’ concerns and said if they can show “strong value for money” they will continue to be funded.

But the peers called on the Office for Civil Society to audit the potential impact of Brexit on charities, including the loss of funding and research collaboration, and publish a report by the end of the year.

Elsewhere, the committee said it had “grave concerns” about the Charity Commission’s proposal to charge charities an annual registration fee.

Peers said any such plan must have evidence to back it up and the commission must show how any resulting improvements to its regulation of the sector would directly benefit charities. The committee also urged ministers to commission charitable services based on impact and social value rather than simply going for those that cost the least.

And it criticised the government for causing “unnecessary concern” with an “anti-advocacy” clause in grant awards and with 2014 laws which “threatened the vital advocacy role of charities”.

LOSS: The House of Lords warned charities could lose out after Brexit