The economic impact of the pandemic cannot be understated. The Office for National Statistics announced that the economy contracted by 20.4 per cent in April alone due to the coronavirus. When it comes to the impact on charities, the picture is a cause for concern. Charities estimated they would lose £4bn over the 12-week coronavirus lockdown. Sobering results from a survey recently carried out by the Voluntary Organisations Network North East shows that over 900 voluntary organisations across the North East may close as a result of the crisis. Further, almost 400,000 individuals are no longer receiving a service – or are receiving a significantly reduced service – from the 269 voluntary organisations that support them. Those hardest hit include children and young people, older people and individuals with disabilities.
It is estimated that leaving the EU without a trade deal at the end of 2020 would lead to an 8.1 per cent reduction in the UK’s gross domestic product (GDP) over a decade. In the absence of a full economic impact assessment from the government, these bleak forecasts raise the question of what, if anything, the government is doing to ensure that charities will survive not just the pandemic but also the consequences of not agreeing a trade deal with the EU.
The good news is that the government has promised to replace EU funding, due to end on the 31 December 2020, with the UK Shared Prosperity Fund (UKSPF). Without it, charities are set to lose at least £258.4m. But the devil is always in the detail, and charities need more information from the government. When will the long-awaited consultation about the UKSPF be published? How will the government be in a position to replace EU funding in light of the current crisis?
These are the questions the government must be prepared to address.
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Along with the economic uncertainty, the voluntary and community sector is unable to prepare for what it will be facing in January 2020. There has been a lot of talk about the uncertainty facing businesses when it comes to Brexit, but the voluntary and community sector equally needs to be able to plan ahead to support the communities they serve.
Leaving the EU will mean a range of changes to UK laws, our trading regime and our economy. With the government officially ruling out a transition extension it appears to expect, in the midst of a global pandemic, that business, civil society organisations and individuals will be ready to exit the transition period, and have adapted to a new trading regime and other complex changes by 1 January 2021. It urgently needs to provide charities with support, information and guidance.
The government should provide certainty and clarity about where the UK is headed after the transition comes to an end later this year. If it cannot do so, the charities serving the Covid-19 front line will find themselves in dire straits.
Carol Botten is chief executive of Voluntary Organisations Network North East.
