Hundreds of voluntary organizations have been forced to close shop or scale back operations due to government delays in replacing EU funding, The Guardian has learned, as the fallout from Brexit continues to affect across the UK.
Three years after Boris Johnson was swept into power promising to “get Brexit done”, a Guardian reporting project finds that businessmen, farmers and charities are still grappling with the reality of life outside the EU.
A new analysis of government funding meant to replace EU support shows multi-billion pound gaps in funding for agriculture and economic development.
The Welsh Council for Voluntary Action (WCVA), a national umbrella organization that includes many charities that depended on money from the European Social Fund to pay wages, is one of those that revealed little-known new Brexit problems.
The government announced the exact allocations of the UK’s Shared Prosperity Fund (SPF) in December to replace £11 billion from the EU’s Regional and Economic Development Fund (ERDF) and the European Social Fund.
But by then it was too late for “hundreds of organizations,” said Matthew Brown, WCVA’s chief operating officer.
“We all have to make staff redundant because the UK SPF has not arrived on time,” he added.
Welsh Economy Minister and Labor Senedd member Vaughan Gething claims Westminster’s share of replacement funds has left Wales £772m short of ERDF and ESF funding, a figure denied by the government . “The whole approach to the Shared Prosperity Fund has been chaotic,” he said.
Scotland also claims it is worse off with replacement funding. Jobs Minister Richard Lochhead said: “The UK Government’s Shared Prosperity Fund is failing to deliver the replacement funding that was promised to Scotland, meaning communities across the country will miss out on of £337 million of investment between 2022 and 2025.”
Meanwhile, many exporters remain exasperated by barriers to trade with the EU bloc, including customs checks and extra red tape; while industries that previously relied heavily on low-skilled EU labour, such as hospitality and food production, are facing staff shortages.
Employers say that while the new skilled worker visa scheme at the heart of the government’s ‘points-based’ immigration system covers a wider range of jobs than in the past, it is bureaucratic and costly to administer
“It costs a lot of money to become a sponsor and get a visa: almost every company would need a professional adviser to do that. It’s incredibly difficult,” said Neil Carberry, chief executive of the Recruitment and Employment Confederation.
British Meat Processors Association chief executive Nick Allen said it cost £12,000 per worker, in visa, transport and accommodation costs, to bring in butchers from the Philippines to fill jobs that would previously have been done by EU workers .
“I don’t think anyone believes that we will ever be able to fill all these roles with British-born labour,” said Allen, whose industry was 65% reliant on non-British staff before Brexit.
The incorporation of low-skilled workers from abroad has become almost impossible under the new system. Kate Nicholls, chief executive of UK Hospitality, said: “That’s where we have the most difficulty – you can hire an executive chef, but if you don’t have a kitchen porter, the kitchen can’t open. If you don’t have housekeeping, the hotels can’t open – these basic skills are needed.” Ministers have encouraged businesses to look for staff closer to home.
While many large companies have become accustomed to overcoming new trade barriers in the EU, smaller exporters describe being hit by inconsistent customs and VAT processes.
“It really annoys businesses that they have to suffer these extra costs,” said William Bain, head of trade policy at the British Chambers of Commerce.
He called on the government to resolve the impasse over the Northern Ireland protocol to pave the way for a better working relationship on other issues.
“Clearly, until there’s stability, let alone a resolution on this, we’re not going to see any of the improvements and easements that would make life so much easier for small businesses,” he said.
An inter-industry veterinary and environmental health working group, the Sanitary and Phytosanitary Certification Working Group, estimated that the new requirement for export health certificates, signed by a vet, added £60m to the cost of exports of food in Europe in 2021.
A government spokesman said England, Scotland, Wales and Northern Ireland “receive at least as much as before” from the UK’s new shared prosperity fund “although they are also free from EU red tape and have more see how money is made.” used”.
A Defra spokesman said it was committed to keeping the annual farming budget at the same level as the EU, with cuts in farm subsidies in England being reinvested in the sector.
They added that the Common Agricultural Policy “did nothing to improve food production or food security and gave half the budget to the top 10% of owners. We are designing our new programs in partnership with farmers to support the decisions they make for their farms.”