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Austerity, not Brexit a bigger worry for charities

Published 03/10/2016

Charities and social enterprises see austerity as a bigger threat than Brexit, according to a new report
Charities and social enterprises see austerity as a bigger threat than Brexit, according to a new report

Charities and social enterprises see austerity as a bigger threat than Brexit, according to a new report.

Although the UK's withdrawal from the European Union is still a significant concern, 75% of third sector organisations cited cutbacks as their major worry in the latest Ulster Bank and CO3 Third Sector Index.

Pension issues were also highlighted - with around quarter of organisations which have the funds currently in deficit, the study said.

Ulster Bank chief economist, Northern Ireland, Richard Ramsey, said: "Th e survey raises the wider point that austerity is not over; indeed far from it.

"While the Chancellor may go down the route of increasing infrastructure spending in the Autumn Statement, there is unlikely to be much of a change in direction when it comes to the UK government's austerity policy. The Chancellor faces a choice of maintaining the rate of austerity or easing the pace and implementing it over a longer time frame.

"Overall, the third sector in Northern Ireland doesn't have its challenges to seek, with austerity, Brexit, and the onset of the pension crisis, which will only intensify as falling bond yields make pension provision much more expensive. This environment makes it all the more important for the sector as a whole to continue to adapt and to find new streams of revenue."

The leaders of some of Northern Ireland's largest charities as well as small community groups were questioned as part of the quarterly survey.

Some 80% said they believed Brexit would have a negative impact on their organisation, with just 1% believing it would have positive implications.

A further 65% were concerned about the long-term implications of the UK's decision to the leave the EU for their organisation's sustainability.

Furthermore, the vast majority (86%) criticised local politicians for not giving the matter sufficient attention.

Organisations also reported a deterioration in cash flow since the June referendum, with 31% claiming their position had weakened and 58% predicted the Northern Ireland economy would worsen in the next 12 months.

Despite the challenging environment, two-thirds (65%) of third sector leaders said that their organisation has seen an increase in demand for its services in the last quarter, and almost one quarter (22%) said that it had increased headcount.

Nora Smith, chief executive of CO3, said: "Brexit has played a central role in deepening the levels of concern and uncertainty for members on the sustainability of their services and indeed their organisations.

"Therefore, we want to ensure that the particular implications of Brexit on the third sector are listened to and central to any negotiations. To date, that has not been the case.

"Our members' work is focused on changing lives, in some cases saving lives on a daily basis. The results certainly highlight the importance of investing in our sector to ensure that vital services are not lost.

"The level of demand for their services continues to rise against a backdrop of uncertainty and funding cuts."

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