The EU referendum and the third sector in Wales

What will happen to the European funding that Wales currently receives?

The Welsh Cabinet Secretary for Finance and Local Government has stated that Wales is a net beneficiary from the European Union and it is essential that every penny of EU funds to Wales must be replaced, his statement can be found here. However, negotiations surrounding any successor domestic funding arrangements  are currently taking place with Westminster. Once Article 50 of the Lisbon Treaty is triggered to formally leave the EU, the UK will enter a two-year negotiation period with the EU to decide the terms of the UK's exit. It is within this period that a post-EU economic plan will be drafted and we will know for certain what will happen to European Funding. 

In the meantime, the Welsh European Funding Office (WEFO) has confirmed that the current funding arrangements remain in place until the process of withdrawal from the EU is completed; so for example if the UK government triggers Article 50 in October 2016 then our membership of and funding from the European Union would finish in October 2018. Welsh organisations are advised to maximise this window of opportunity while we remain eligible for all EU funds as part of a member state.

Wales could still be able to participate in future EU Funding programmes despite the fact that the UK will no longer have status as an EU Member State. Many EU funding streams are available to non-EU member countries, including key programmes such as Horizon 2020 and Erasmus+. However, this does depend on the terms agreed for the UK's exit from the EU during the two-year negotiation period.
 

What does Brexit mean for the third sector in Wales?  

The decision of the UK to leave the European Union has thrown into light many difficulties and uncertainties faced by the third sector, including a potential significantloss in funding opportunities.  Also, the divisive nature of the referendum has resulted in a higher incidence of hate crime and xenophobia. This undoubtedly puts a strain on the third sector, whose work, at its core is to promote cohesion, empower people and connect communities.

As a champion for third sector organisations, WCVA will seek to influence the government to secure the best possible outcome for the sector post-exit and is already beginning to lobby both the Welsh and UK governments to hold firm on ther pledge that Wales will not become a financial loser in the exit process.

Our recommendations for UK Government are to:

  • Provide reassurance that current investment levels received from the EU to Wales are not under threat and that the same level of resources will continue into the future and be ring fenced for regional economic and social regeneration;
  • Understand that the third sector is central to the work that now needs to take place to strengthen cohesion in our communities;
  • Recognise the value of innovation that the third sector is leading on to increase prosperity for all;
  • Commit to an authentic partnership approach that builds upon the Welsh experience of delivering EU Structural Funds to genuinely engage communities; and
  • Engage with the third sector in shaping the future both in the negotiations with EU and through the Welsh Assembly.

Equally WCVA is stressing that it is now more important than ever to work together in order to heal some of the divisions that emerged during the referendum and its result. During this time of change, it is essential that we restate and vigorously reaffirm our roles and missions.
 

What does Brexit mean to organisations who are in receipt of European Structural and Investment (ESIF) funding? 

It is important that organisations in receipt of ESIF continue project delivery and management as 'business as usual'. All terms and conditions for these projects still apply and will continue until the project is over. For example, it will still be required that organisations keep all documents about the project for the agreed length of time. We urge organisations to remain vigilant in managing their projects, and monitoring and evaluating outcomes and impacts, as this will contribute towards demonstrating the need for continued funding from alternative sources.

If you have a question relating specifically to document retention periods or any other aspect of managing a ESIF projects, please contact the Third Sector European Team (3-Set)

WEFO are continuing to consider, assess and approve applications for EU funds and it is important that the sector continues to engage to make the best use of the opportunities we have.
 

Will we still need to adhere to European laws once we have left the European Union?

Existing European legislation will apply to the UK until we have officially left the European Union. Until the official exit, the UK will be able to take advantage of all European policies such as the Freedom of Movement of trade and people. During the two-year negotiation period, it is likely that the UK government will revise its transposed European laws and legislations. However, these revisions will most likely be compliant and in some circumstances equal to European standards in order to possibly access the Single Market in the future.

There is no definitive answer to what will happen to EU derived laws once Britain ceases to be a Member State.

The Electoral Reform Society (ERS) launched an online toolkit 'A Better Referendum' to highlight some of the key issues surrounding the EU referendum. The areas of discussion in this toolkit cut across some of the key areas of interest for the third sector in Wales. Although the tool kit was designed to promote discussion in the run up to the referendum it is a valid source of information which shows how EU laws and policies are integrated within the UK.

The specific areas covered by the toolkit are Social Policy, Regions and Nations, Crime and Security, Economic Impact and Migration and Work.
 

What is the position for EU nationals in the UK and UK citizens in the EU?

The position following a formal exit from the EU (ie after Article 50 has been triggered) will depend on the final trade position negotiated, which is currently unknown. Current rights to remain in the UK are granted under EU law. Under possible future UK law citizens from European countries may be treated differently. UK nationals will be able to continue to work freely in the EU until a formal exit date. The positon of those already living in the EU and those who wish to move post a formal exit is still unclear and will be decided by each country or EU wide depending on the final trade agreements.

Will projects that have already been awarded funding continue to receive it until the end of the agreed date even if Article 50 is invoked?

Yes, although WEFO is currently reviewing project offer letters and will be issuing new ones shortly.

The message from WEFO is very much business as usual. They still want to spend the money and for projects to perform. This will strengthen the case with UK government to maintain the current levels of funding. Extra vigilance is required as WEFO anticipate that the Commission will be looking more closely at projects within the UK.
 

Once we invoke Article 50 will projects still be approved?

We don't know, but it's certainly possible. There is still work ongoing across the operational programmes of the structural funds and there are projects that can be delivered in the timeframe required. It is highly possible that projects will run until 2020.

We envisage the discussion for replacement structural funding coming quite low down in the list of priorities during formal exit discussions and negotiations. There is no certain answer but we will have some more clarity when formal discussions take place once Article 50 has been triggered.
 

Should we be looking to front load activities and spending in new project bids i.e. 2 year projects?

If you are planning a project and you think it can be delivered within a shorter time frame whilst also hitting targets, you can frontload activities and spending. Hitting targets will strengthen the case for programme extension during the negotiation process. It will also provide evidence that organisations will need continued strategic support beyond a formal exit.

It is still important to be realistic when planning any project activity to ensure that these funds are utilised for those who need them most.
 

Do you anticipate additional audits from the EU?

Additional audits are a real possibility. As the programmes come to an end, the Commission will want to do a thorough job in closing down the books and we could end up with additional audits.

The message we are getting from WEFO at the moment is be vigilant and be clear with your audit trails. We need to make sure that all project delivers are being as vigilant as possible and not cutting any corners when it comes to evidencing their project activity.
 

If we are running or have previously run a European project, will retention rules still apply when we leave the European Union?

Yes - retention rules are part of the contractual agreement for the receipt of any funding. If you have any questions relating specifically to retention requirements for this or any previous European funded programme, please contact 3-SET at 3set@wcva.org.uk.
 

Will WCVA continue to actively promote the impacts of EU funding?

Yes - we want to make the case for continued financial support to the sector following an exit from the EU and showing the real impact we can make with the money we currently receive is an excellent way to do this. If you have an idea for a case study or good news article about EU funded investment in your community, please contact 3-SET at 3set@wcva.org.uk.
 

Is there a comprehensive list anywhere of all EU funded Welsh Government programmes? If not, can WCVA request this on behalf of the sector?

Please click here for a link to all approved projects and those still under development.
 

Has Interreg given any communication on implications for projects that are set to continue beyond 2 years?

Please click here for the latest statement regarding Interreg projects.
 

If we are currently working on a transnational project proposal is it worth us carrying on?

Yes -  it is highly likely that the transnational programmes will continue in some way, shape or form after any exit from the EU.  In the future there may be the possibility for the UK to continue engaging with these transnational programmes, the level of engagement will depend on the negotiation agreements.

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