Brexit, Northern Ireland and the third sector

The Brexit decision is a couple of weeks old and nothing has begun to calm down and nothing has been settled.

Uncertainty is the fundamental aspect of these socioeconomic times but, nevertheless, everyone – individuals, the state, businesses and organisations in the third sector – need to make efforts to shape themselves for the unknown changes to come.

NICVA Chief Executive Seamus McAleavey spoke with Scope this week about the organisation’s views on adapting to Brexit, consequences for the sector, and

Firstly, however, he was deeply critical of those who would seek to undermine the result of the referendum, as it stands.

“In terms of democracy, the people have spoken. That is NICVA’s view, it’s my view. If it had been a remain vote we would have said “thank you very much.”

“But that does not mean what is to come is straightforward. Before the vote we were looking at a continuum where on the one side was as-you-were membership of the EU, and the other end is out, splendid isolation – lock, stock and barrel. The reality of Brexit will be something in between those points.

“What the UK government has to focus on, and the Executive has to focus on here in NI, is making the best out of the circumstances we are in, and getting a deal that will have the least negative impact for people living here.”

The third sector

An obvious observation, but not a trivial one, is that the UK will remain part of the EU – with all its entitlements and its responsibilities – until it leaves. This process is likely to take a couple of years with negotiations about the future taking place concurrently.

There is however no requirement for these negotiations to be completed before Brexit.

“For the vast majority of organisations the central impact of Brexit is the wider social and economic impact. In that sense, the impact on our sector is the same as the impact on individual people; we have to wait and see what the impact on the economy will be, what the impact on GDP is, which affects tax revenues, and lower revenues put a squeeze on public expenditure.

“However, for some particular groups it’s much more intimate, particularly those involved in employment training programmes. They actually have a funding relationship, through the NI Executive, with the EU - a €250m Euro funding programme, that’s probably secure until 2018, but we cannot be sure what happens after that.”

Mr McAleavey dismissed the view that UK economic prospects are being talked down, in some self-fulfilling way, since the referendum, adding that the public makes up its own mind about these things.

However, he said he does believe there are real risks in this area.

“When times are perceived to be tough, what the public tends to do is save rather than spend. When people are afraid they pay down debts and try to increase their savings. The biggest danger to the UK economy is low consumer confidence and that UK consumers reducing their spending.

“Overall the picture looks gloomy but I do believe that in good times not everyone does well and in bad times not everyone does badly. There are always opportunities for organisations, in good times and bad.”

Opportunities in outcomes and innovation

The new, outcomes-based approach to a Programme for Government alongside Brexit – all within the context of shrinking public spending generally – creates opportunities for those able to innovate, either by design or implementation.

The NICVA Chief Executive cites programmes that have helped people move into the community having spent significant time, even decades, in secure hospitals.

Voluntary organisations have been very important in these changes that have both vastly increased the independence of people with provision that has cost significantly less, per person, than what went before.

“That is not a case of denying people services but instead helping them to live in the way they want to live. There will be always people who need residential care, or end-of-life care, but the more we can reduce demand on some very expensive services, in a way that means they are not required for people, the more innovation can save money while providing the same or better services.”

This will become even more important it, as Mr McAleavey predicts, the UK government is not particularly inclined to reimburse Northern Ireland with any funding that disappears as part of our withdrawal from the EU – what could be a double hit for the local economy, especially for the third sector, if tax revenues also drop.

“I’d be surprised if there was any financial windfall from leaving the EU, in terms of unpaid EU receipts coming to Northern Ireland from the Treasury. This means the NI Executive will have to perform better, because they will be doing things in adversity.”

These are the straitened times in which we live. The referendum was an odd result in recent democratic history, with the people voting against what is expected to be their own economic interests – though not everyone will see things that way – and this will, of course, have consequences.

However, politics is not simply economics and, while the outlook for Northern Ireland might be at once unpredictable and vaguely bleak, the UK leaving the EU is not a nuclear option, or “an existential threat”.

“Remain, from our point of view, would have been better but Brexit will not be the end of the world. However, it will have to be faced up to and dealt with and the best will have to be made out of circumstances that people find themselves in.”

Make do, mend – and innovate where you can, whether you are an individual, organisation, business or a government.