Blog

Charity finance policy

1 August 2017, 10:35

Why has CFG written a report on potential Brexit deals?

As you may have read in the newspapers, Charity Finance Group has drafted a report on the potential opportunities and risks facing the charity sector on Brexit. We have considered ...

Post byAndrew O'Brien

Where next?

Events »

Monday, 7 December 2020
Annual Conference 2020 More »

News »

Thursday, 26 November 2020
CFG gives small charities a boost with launch of new bursary scheme More »

As you may have read in the newspapers, Charity Finance Group has drafted a report on the potential opportunities and risks facing the charity sector on Brexit. We have considered the two main scenarios being considered at the moment, a Brexit deal which means that we remain in the Single Market and the customs union and a scenario where we leave the Single Market and customs union. Our analysis indicates that there are significant risks to UK charities staying in the Single Market and customs union if this leads to the continuation of EU rules on tax, public service regulations and state aid. This is because we would be left in a situation in which we cannot change rules which negatively impact on the sector, but would be in no position to change them. Leaving the Single Market and customs union would give the UK government the flexibility to do something about these issues. In this blog, I try to anticipate questions we may be asked about this report and CFG’s position on Brexit. Aren’t there risks to the economy which would impact on the UK charity sector? Why are you using the term ‘clean Brexit’ in the report and not ‘Hard’ and ‘Soft’ Brexit? Aren’t you ignoring the risk that the government will do nothing with its new powers so charities will be worse off? Won’t leaving the Single Market and Customs Union mean an end to access to EU funds and EU workers? So a ‘clean Brexit’ is the only option that will help charities? Is CFG pro-Brexit then?

Aren’t there risks to the economy which would impact on the UK charity sector?

Absolutely, and the report highlights this at the very beginning. It is hard to read into the tea leaves of what might happen to the economy, but obviously if the UK economy suffers, charities will suffer as well. Poor economic performance could undermine any potential benefits of a Brexit deal and would harm beneficiaries. But given the limited knowledge that we have about how the economy may perform under any Brexit scenario, we have to put those to one side and focus on what the practical outcomes may be for charities and how they help their beneficiaries. This is what we have tried to do in the report, but we will keep looking at this issue and our analysis may change depending on the negotiations or better economic information.

Why are you using the term ‘clean Brexit’ in the report and not ‘Hard’ and ‘Soft’ Brexit?

This has been a subject of much internal debate. Our view is that all terms around Brexit are somewhat partisan. Our motivation in writing this report is to reach out to new audiences – specifically those that have not engaged with the sector on Brexit - so that they understand the needs of charities. In order to do this effectively, we thought that ‘Clean Brexit’ was most likely to get a hearing in those Brexit-supporting audiences where charities have not been able to make themselves heard yet. The key is to focus on the substance of different Brexit deals, the words (hard, soft, clean, fudged) are not important. If we were writing this to reach out to anti-Brexit groups, we would use different language.

Aren’t you ignoring the risk that the government will do nothing with its new powers so charities will be worse off?

Definitely not. We have written this report in order to encourage the government to do something. The latter is obviously better than the former. That still requires the government to make positive decisions, and just leaving the Single Market and Customs Union without making these positive decisions would not help charities at all.

Won’t leaving the Single Market and Customs Union mean an end to access to EU funds and EU workers?

That is not our analysis. The government could choose to keep access to EU funds and EU workers, if it makes the right decisions. This is what we argue in the report. Ultimately, the UK government will set the rules on migration, so if it wants charities to be able to access EU workers, it can choose to do so. EU funding is trickier, but as with migration, if the UK wants to achieve a positive solution, it can and other non-EU member countries have got access to EU funds on international development, for example, through the right structure. Leaving the Single Market and Customs Union does not mean that you have to give up these things.

So a ‘clean Brexit’ is the only option that will help charities?

No. There are lots of scenarios that could help charities. A Brexit deal which gave flexibility in all the areas that we have proposed and stay in the Single Market and customs union, would help the sector. However, given the current EU negotiating position, it is our assessment that this would be very hard to achieve and would require the UK government to make specific efforts to secure exemptions, opt-outs and flexibilities in the areas that we have noted such as tax, procurement and state aid. The more complex the deal, arguably, the more risks there are that it won’t allow for this flexibility. A ‘clean Brexit’ is less risky because it would give the UK much greater flexibility on these issues.

Is CFG pro-Brexit then?

CFG has no position on Brexit in terms of whether it is a good or a bad decision. We didn’t campaign on this issue and we don’t intend to do so now. Our aim is to get the best possible outcome for charities so that they can help their beneficiaries. We will continue to work with whoever we can to secure the best outcome and raise these issues up the agenda. Sadly, our research has indicated that neither charities nor the public believe that the social impact of Brexit is being properly considered. It is our job to try and change that. Â« Back to all blog posts

Blog

Why has CFG written a report on potential Brexit deals?

Aren’t there risks to the economy which would impact on the UK charity sector?

Why are you using the term ‘clean Brexit’ in the report and not ‘Hard’ and ‘Soft’ Brexit?

Aren’t you ignoring the risk that the government will do nothing with its new powers so charities will be worse off?

Won’t leaving the Single Market and Customs Union mean an end to access to EU funds and EU workers?

So a ‘clean Brexit’ is the only option that will help charities?

Is CFG pro-Brexit then?

Related Content

Finance Focus November/December 2020

Finance Focus October 2020

Bespoke interventions for the sector are never more needed

Finance Focus September

Collapse in charity provision looms at moment of greatest need

Finance Focus August

Finance Focus July

Summer Economic Update

"Whack-a-mole" economic update

Coronavirus Job Retention Scheme update

From red to green, but what does it mean for us?

Restarting the economy amidst coronavirus

Natwest support to the charity sector

What does the chancellor’s announcement mean for charities?

COVID-19: General guidance and short-term action planning

COVID-19 – what planning should charities be undertaking?

What should charities expect from the budget?

Caron Bradshaw appointed as a member of new SORP Committee

Sector bodies issue joint proposal for Chancellor ahead of March's Budget

Key messages from the Bank of England’s January Monetary Policy Report

Learn, earn and change the world: Social Change Degree Apprenticeship opens for second round of employer partners

Takeaways from the Migration Advisory Committee report

Economic Outlook Briefing December 2019

Finance Focus Nov/Dec 2019

A Charity Finance Manifesto To Enable Civil Society To Thrive

Has the Charity Commission has taken the wrong tone in its election guidance

Why does the narrative around public 'trust' makes me feel so uncomfortable?

What does Labour’s independent schools proposal mean for charities?

A living wage needs to lead to a sensible discussion about charity funding

Time to get on an election footing

Spending Review Briefing 2019

We must prepare for a no-deal Brexit

Five takeaways from August’s Inflation Report

The lessons for Oxfam and the wider sector

Our new PM is neither a buffoon nor a jester. It's time to take him seriously.

What does the new prime minster mean for the charity sector?

The Charity Tax Commission report - does it go far enough?

BEIS Review of the Financial Reporting Council

CFG Annual Handbook 2019

Economic Outlook Briefing 2019/20

Brexit crystal ball

Spring Statement 2019

If it comes down to a vote on no-deal, vote against it, says CFG

Charity Property Matters Survey 2018

CFG responds to the Charity Commission’s consultation on the SORP-making process

Charities are ill-prepared for a no-deal Brexit and fear the worst: CFG survey

Are you prepared for a WTO Brexit?

What the recent SCOTUS judge controversy can teach us about the Charities’ SORP

The Brexit deal is bad for charities says CFG, as it urges MPs to vote against it on Tuesday

London Charity Property Survey Findings

London Charity Property Survey Results in Summary

London Property Survey Statistical Analysis

Increasing number of charities fear property poses risks to their charitable mission

Charity Finance Group's briefing on the Autumn Budget 2018

Live Blog: Budget 2018

Labour Conference September 2018 update - Brexit and Beyond

Brexit will be bad for both charities and beneficiaries, says new report from CFG

Cost Benefit Analysis Of Brexit For Charities

Does the Civil Society Strategy deliver for charities?

Post-Brexit immigration rules could cause skills shortage in charities

The charity work force in post-Brexit Britain

Economic Outlook Briefing 2018

Charities need to find nearly £4bn additional income by 2020 finds CFG

CFG Annual Handbook 2018

Apprenticeship Levy Guide

Spring Statement 2018: What should charities be looking out for?

Review: Wolves in Sheep’s Clothing Report - Extremism in Charities

A stairway to heaven on business rates for the charity sector?

Live Blog: Autumn Budget 2017

What should charities expect from the Autumn Budget 2017?

Serious but still lacking substance – Labour Party Conference 2017