CONCORD in the news: This article has been published in Devex on April 4th. 

U.K. NGOs could miss out on 140 million euros ($150 million) of funding a year from the European Union as a result of Brexit, according to new research by Bond, the U.K. NGO network, with some organisations saying they are already feeling the impact.

While the specific terms of a departure deal remain unknown, U.K. charities could lose their eligibility for most EU development funding after the country leaves the EU, the study — which is not yet published — suggests.

Theresa May

Prime Minister Theresa May signed her letter of notification to the President of the European Council setting out the UK’s intention to withdraw from the EU.
Photo by: Jay Allen / Crown Copyright / CC BY-NC-ND

Based on the 2015 figures, small and medium-sized organisations reliant on EU contracts are likely to be worst affected. But larger U.K.-based international NGOs that traditionally receive high contributions from the EU’s 1 billion euro European Civil Protection and Humanitarian Aid Operations budget will also be hard hit.

Some civil society groups have reported that they are already losing out on longer-term EU contracts after U.K. Prime Minister Theresa May officially triggered Britain’s exit from the Union last week.

Based on our research, small and medium-sized organisations are going to be the most affected due to … their smaller total budgets, so EU grants create a bigger hole when they are no longer there.

Having said that … ECHO funding tends to go to the larger NGOs, so everybody is hit at the end of the day — and, of course, beneficiaries too.

The humanitarian sector is likely to take the biggest total hit, which I think should worry people. Human development, including health and agriculture and civil society strengthening, could also be hit.

Tamsyn Barton

Chief executive, Bond, the U.K. NGO network

Traditional U.K. recipients of ECHO funding include Oxfam, International Rescue Committee, International Medical Corps and Save the Children.

The EU is a major source of development funding, contributing approximately 59.3 billion euros ($63 billion) in official development assistance in 2015. The EU’s institutions are responsible for dishing out approximately one-fifth of this budget through EuropeAid, which funds development projects, and ECHO, which finances humanitarian assistance.

However, I would suggest that bigger NGOs that have strong chapters in the EU might be able to protect their access to European development funding by transferring their EU implementing budgets to organisations based in the region.

U.K. NGOs may also retain access to the European Development Fund post-Brexit.

TheEuropean Development Fund (EDF), which provides development aid to Africa, the Caribbean and the Pacific regions, as well as to overseas territories, is not part of the official EU budget and contributions are made on a voluntary basis.

In 2015, the U.K. contributed nearly 15 percent — around $585 million — of the fund. If it continues to support the EDF after it leaves the EU, British NGOs could still receive funds.

Furthermore, the EDF may be restructured after the current commitments end in 2020, which could represent an opportunity to renegotiate the U.K.’s involvement. There could be sufficient political reasoning to say it’s a worthwhile engagement to continue as an example of multilateral cooperation.

At the same time, however, EU development spending will suffer from the loss of U.K. core contributions and, potentially, from political pressures to divert funding to security. There are already pressures on issues like migration and security and so I’m expecting additional investments will go to security, at the cost of others, and likely development is one area under threat.

Johannes Trimmel

President, CONCORD Europe

Barton and Trimmel advised NGOs from all countries to collaborate closely, to monitor EU funding contracts and to share information.
It’s important for all NGOs to join hands and to stay firm together to say we don’t allow development cooperation to be diluted and diverted and put under other political and policy areas. Greater collaboration is needed now more than ever.
Johannes Trimmel

President, CONCORD Europe