Charities Face Huge Deficit After EU Funding Changes

Many of the most high-profile voluntary groups in Scotland stand to lose up to £20m following a shake-up in vital European funding. The organisations, which include the Prince’s Trust, lone-parent charity One Plus, and the Wise Group, are warning the change will lead to 1200 redundancies and the closure of projects serving 17,500 people.

Areas such as deprived parts of Glasgow and the west of Scotland and former coalfield villages of Fife, which received millions in European funding over the past 20 years, will be worst hit.

The Scottish Council for Voluntary Organisations (SCVO), which represents 50,000 groups, warned that companies have already been forced to start making redundancies and reducing services.

European funding to developed countries such as the UK is to be cut by 50% in the long term because of the needs of some of the new accession states, such as Poland.

Voluntary bodies such as the Scottish Association of Mental Health, which ordinarily make bids directly to Brussels based on the quality of the services they plan to provide, have also been told the funding may now be given to local authorities or Scottish Enterprise to hand out.

After protracted wrangling between Brussels, Holyrood, and Westminster, money expected in January 2007 has been delayed until the autumn of next year.

Organisations such as the Wise Group, which last year helped to get 2500 people back into work, and West Fife Enterprise, which works with 250 people a year in ex-coalfield communities, say they will be forced to cut services and make redundancies unless the executive offers a bridging fund. Unless the situation is resolved, some organisations could be forced to close with 1200 posts threatened.

Martin Sime, chief executive of SCVO, said: “The scale of the damage these proposals will do to some exceptional services helping our most excluded communities’ demands a much better, joined-up response.

“For over 20 years, voluntary organisations have pioneered innovative approaches to training and employment utilising the European Social Fund to develop real partnerships in Scotland. The skills, experience and commitment of more than 1000 project organisers, counsellors and trainers are also at risk.

“We are happy to compete for what are much more limited European funds this time round. But we need transitional support and a level playing field.”

Allan Wilson, Deputy Minister for Enterprise, said: “I am acutely aware of the challenges that the voluntary sector will experience with the decline in EU funding. Our priority is projects supporting vulnerable clients.

“We recognise that a delay to the start of programmes could have a significant impact on some organisations.

Consequently, we will be running a gap funding round in January with a view to decisions being taken by Easter. The gap funding round aims to minimise the impact on partners, and help support projects that target the most vulnerable.”