the impact of brexit on eu funding for uk csos · 2017-07-20 · the impact of brexit on eu funding...

TheimpactofBrexitonEUfundingforUKCSOsThefutureofEUfundingforUKdevelopmentandhumanitarianCSOs

...............................................................................................................................................................................................................................................................TheimpactofBrexitonEUfundingforUKCSOs 2

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Listofacronyms.................................................................................................................................3

ExecutiveSummary............................................................................................................................4

Introductionandmethodology..........................................................................................................6

Currentfundingsituation...................................................................................................................7

Eligibilitybyfundingstream.............................................................................................................11

Overviewofvulnerabilities..............................................................................................................14

Keyconcernsandmitigationstrategies............................................................................................17

Conclusions......................................................................................................................................20

Recommendations...........................................................................................................................21

Casestudy:Comparingcountries.....................................................................................................23

Contents

AboutBond

Bondisthecivilsocietynetworkforglobalchange.Webringpeopletogethertomaketheinternationaldevelopmentsectormoreeffective.bond.org.uk

Acknowledgements

ThisreportwaswrittenbyRachelHaynes&CostanzadeTomawithsupportfromTamsynBarton,MarianaRudgeandRoseLonghurst.We would like to acknowledge and thank the following people for their assistance and support in putting together this report: Margherita De Candia for her tireless work in carrying out data analysis and synthesis in relation to the Financial Transparency System and the Survey; Zuzana Sladkova, from Concord, for feeding in crucial background FTS data analysis and synthesis at a Europe-wide level and for assistance to the research team in working with the FTS; Jaymie Duke and Elisa Cattaneo for their excellent support to coordination and communications; Simon Maxwell for his ideas and feedback, and Sarah Sandon, Francesco Gatta, and Jenny O’Brien (ECFG reference group) for their direction, oCSOing support and final feedback.

The impact of Brexit on EU funding for UK CSOs, July 2017PublishedbyBond,SocietyBuilding,8AllSaintsStreet,LondonN19RL,UKRegisteredCharityNo.1068839CompanyRegistrationNo.3395681(EnglandandWales)©Bond,2017ThisworkislicensedunderaCreativeCommonsAttribution-NonCommercial4.0InternationalLicense,https://creativecommons.org/licenses/by-nc/4.0

............................................................................................................................................................................................................................................................... TheimpactofBrexitonEUfundingforUKCSOs 3

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A4ID AdvocatesforInternationalDevelopment

ACP AfricanCaribbeanPacificcountries

CSO CivilSocietyOrganisation

CSO-LA CivilSocietyOrganisations-LocalAuthorities

DCI DevelopmentCooperationInstrument

DFID DepartmentforInternationalDevelopment(UK)

DGDEVCO DirectorateGeneralDevelopmentCooperation

DOCHAS TheIrishAssociationofNon-GovernmentalDevelopmentOrganisations

ECHO EuropeanCivilProtectionandHumanitarianAidOperations

EDF EuropeanDevelopmentFund

EEA EuropeanEconomicArea

EFTA EuropeanFreeTradeArea

EIDHR EuropeanInstrumentforDemocracyandHumanRights

ENI EuropeanNeighbourhoodInstrument

EU EuropeanUnion

FPA FrameworkPartnershipAgreement

FTS FinancialTransparencySystem

HIPC HighlyIndebtedPoorCountry

IcSP InstrumentcontributingtoSecurityandPeace

ILO InternationalLabourOrganisation

IPA InstrumentforPre-Accession

LDC LeastDevelopedCountry

MFF Multi-AnnualFinancialFramework

MIC MiddleIncomeCountry

NCVO NationalCouncilforVoluntaryOrganisations

NIDOS NetworkofDevelopmentOrganisationsinScotland

ODI OverseasDevelopmentInstitute

OECD OrganisationforEconomicCooperationandDevelopment

PHASE ProvidingHumanitarianAssistancetoSahelEmergencies

PRAG ProceduresandPracticalGuide(forECdevelopmentfunding)

Listofacronyms


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On 23 June 2016, as a result of a nationwide referendum, the UK electorate chose to leave theEuropeanUnion.Followingthereferendum,differentpathstoBrexitwereenvisaged,rangingfroma“hard” Brexit, whereby the UKwould no longer be amember of the singlemarket or the customsunion, to softer versions of Brexit, similar to those governing relationships between the EuropeanUnionandNorwayandtheotherEuropeanEconomicArea(EEA)countries,orSwitzerlandwhichispartof theEuropeanFreeTradeArea(EFTA). It isuncertainwhetherorhowthisgeneraldirectionwouldimpact theUK’s involvement in EU aid instruments andpolicy, but intuitively, a softer Brexitwouldimplymore continued cooperation. This study, commissioned by Bond at the end of 2016, focusesspecificallyontheimpactoftheUK’sexitfromtheEUonUKInternationalCivilSocietyOrganisations(CSOs)accesstoEUfunding.

TheUKisthesecondlargestrecipientofEUaidtoCSOs(bothgrantandservice(commercial)contractscombined),thelargestbeingFrance.TheUKisthelargestrecipientofEUgrantaidtoCSOs1.Between2012-2016, EU development and humanitarian aid to UK CSOs amounted to an average ofapproximately€300minfreshcommitmentseachyear2.In2016,thevalueofnewcommitmentstoUKCSOswas€356.9m3.

ThisstudyhasexaminedspecificvulnerabilitiesarisingfromtheimpactofBrexitondevelopmentandhumanitarianinstruments,withaparticularfocusongeographies,sectorsandCSOsize.DependingonpossibleBrexitscenarios,UKCSOsarelikelytofaceanannualfundingshortfall,whichcouldbeashighasthefullamountthey’recurrentlyreceiving(€356.9min2016).

Vulnerabilities

• Once theUK leaves the EU,UKCSOsmay still have restricted access to someEU fundingbyvirtueoftheUK’smembershipoftheOrganisationforEconomicCooperationandDevelopment(OECD).However,evenonthisbasis,UKCSOswillnolongerbeabletoaccessEUfundingforprogrammes in some key countries that are neither Least Developed Countries (LDCs) norHighlyIndebtedPoorCountries(HIPCs),suchasSriLanka.

• In termsof sectors,humanitarian funding is themost significantamountat risk,witharound€211munderthreat4.ItisunclearwhetherUKCSOsrelyingonhumanitarianfundingfromECHOwillstillbeeligibleafterBrexitbasedoncurrentrulesandtechnicalities,orhowmuchleveragethe UK sector might have in negotiating favourable access to the new ECHO frameworkpartnershipagreementsfor2019-2021.Theriskissignificantasthereisnoautomaticeligibility.

• The work CSOs undertake on civil society strengthening, human development, health, andagricultureisalsoatsignificantriskofseeingbigshortfalls.Asmoreorganisationsaccessthesefundinglinesthanhumanitarianassistance,andtheeligibilityforthisdevelopmentcooperationisevenlesslikelytobefavourabletoUKCSOs,thecapacityofCSOstoundertakedevelopmentprogrammesinthefuturewillbeaffected.

1FinancialTransparencySystem20162Newmulti-annualcommitmentsmadeeachyearonaveragebetween2012and2015.ThisisdrawnfromthedatathatappearsontheEC’sfinancialtransparencysystem,andrepresentstheaidgoingtoUKCSOs.3BasedonECFinancialTransparencySystemsearchofnewgrantcontractsin20154ECHOcommitmentstoUKCSOsin2016

ExecutiveSummary


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• Using survey and interview data, the study found that small to medium sized CSOs areparticularlyvulnerabletopotentialchanges,duetoahigherdependencethantheirlargerpeerson EU funding and due to their reliance on development, rather than humanitarian, budgetlines.

Overall,itislikelythatmostUKCSOsthatcurrentlyaccessEUfundswillthusfaceasignificantfundingshortfalloncetheUKleavestheEUandthisislikelytohaveastrongimpactontheirprogrammingindevelopingcountries,atleastintheshorttomediumterm.

ThefearisthattheuniqueanddistinctivecontributionofUKCSOstohumanitariananddevelopmentcooperationwillbeimpactedviatheirreducedaccesstoEUfundingandsubsequentlimitedinfluenceonEUpolicyandpartnerships.UKCSOsdemonstrate their remarkablecompetitivevaluebywinningsubstantial numbers of EU grants; for example, in 2016 almost 25%of ECHO funding commitmentsweremadetoUKCSOs.Theirtrackrecord,reachandexpertiseishigh,andthereispotentialforthistobe under-utilised or even lost if the Brexit deal negotiated by the UK government results in theirineligibilityforEUfunding.

Theresearchshowsthereisadivergencebetweenwhatmightbetechnicallyandlegallypossible,andwhatmightbepoliticallypossibleintheUKandtheEU.Thereisstillmuchuncertaintyaboutthefutureof the UK’s relationship with the EU, and therefore UK CSOs’ access to the EU development andhumanitarian aid budget. This research will need to be updated once further clarity on the Brexitimplicationsisavailable.

Nextsteps

In light of the findings of this research, UK CSOs should take the following recommendations intoconsideration:

Takeonamonitoringrole

1. Closelymonitor new calls for proposals to assesswhether there is any change in current EUeligibilityrulesoranegativebiastowardsUKCSOs.

2. Monitoranysignificantdrop inEUfundingtoUKCSOsevenbeforetheUK'swithdrawalfromtheEU.

3. Monitor andmap the number and typologies ofUK CSOs establishing a base in EUmemberstates.

4. MonitorthestatusofexistinggrantsafterBrexit.

ContinuetoinfluenceEUpolicyandpracticeoninternationaldevelopment

5. While theUK is still amemberof theEU,UKCSOsshouldcontinue toactivelyengage inkeycurrent policy processes setting the direction for future EU development cooperation andhumanitarianpolicies.TheseincludeinformingthenewEuropeanConsensusonDevelopment,influencing the futurepartnershipbetween theEUandAfrican, CaribbeanandPacific states,andcontributingtothedebateontheEU'snextMulti-AnnualFinancialFramework,whichsetsoutinstrumentsandcontributionsforinternationaldevelopmentandhumanitarianpolicies.

6. SupportDFID'sactiveengagement inEU jointprogramming initiatives inpartnercountries topavethewayforcontinuedcollaborationwithUKCSOspost-Brexit.

BondtosecureaUKCSOvoiceinBrexitnegotiations

7. Bond shouldworkwith European civil society organisations to convey the voice of UK CSOs(especially small and medium entities with no base in the EU) and highlight the value of


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partnering with civil society in the dialogue on Brexit with the UK government and the EUinstitutions.

8. Within Bond, the EC Working Group should take on a lead role to allow for continuedengagement and monitoring of the funding and operational implications of Brexit on Bondmembers.

9. BondshouldcontinuerepresentingthesectorindiscussionswithDFID,theTreasuryandotherkeystakeholders.

PossiblefurtherresearchexploringopportunitiesforcontinuedEUfundingtoUKCSOs

10. FurtherexplorelegalramificationsofECHOeligibilitybasedoncurrentrules(forexample,theprecedentofusingConvention124,whichallowsSwissCSOstoaccessfunding.)

11. Furtherclarifythelegalityandconsequencesofusingthereciprocityclausetoallowcontinuedeligibility of UK CSOs for funding instruments under the EU Budget and the EuropeanDevelopmentFund.

12. Further investigate the loss of funding around particular thematic issues and geographicalareas,andinvestigatealternativefundingsources.

On 23 June 2016, as a result of a nationwide referendum, the UK electorate chose to leave theEuropeanUnion.Followingthereferendum,differentpathstoBrexitwereenvisaged,rangingfroma“hard”Brexit,wherebytheUKwouldmakeacleanbreakfromthesinglemarket,tosofterversionsofBrexit, similar to those governing relationships between the European Union and Norway and theotherEEAcountries,orSwitzerlandwhichispartofEFTA.Itisuncertainwhetherorhowthisgeneraldirection would impact the UK’s involvement in EU aid instruments and policy, except where EEAeligibilityisatstake,butintuitively,asofterBrexitwouldimplymorecontinuedcooperation.

BrexitwillinevitablyhaveanimpactonUKcivilsociety.Thisstudy,commissionedbyBondattheendof2016,focusesspecificallyontheimpactofBrexitonaccesstoEUfundingbyUKCSOs.

Thestudydrawsonanumberofresearchsources:

• Data on existing EU grantswas analysed from the EU’s Financial Transparency System (FTS)(usingthe2012-2016figures),andfromECHO’slistsofgrantsmade;

• AsurveyofBondmemberswasconductedduringJanuary2017,witharound60responses(seelistofrespondentsatAnnex1);

• Semi-structured interviews/focus groups were conducted with Bond’s EC Funding WorkingGroup (ECFG) members; with a number of other CSOs; with donor institutions (DFID, DGDevCo, and ECHO); andwith key stakeholders includingODI,NCVO, CADA,NIDOS,DOCHAS,andA4ID(PleaseseelistofintervieweesatAnnex2).

Introductionandmethodology


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Weused2016asourbaseyear,thereforethefollowingfiguresarebasedonnew,multi-year,fundingcommitments agreed during 2016. As seen in Figure 1, 2015 saw a reduction in the total value offundingdisbursedthroughDGDEVCOacrossallcountries(includingtheUK).Thisisbecausethiswasthefirstyearofthenewbudgetfor2014-2020,anddecision-making(andthereforespending)waslow.Commitmentsin2016aremoresimilartopreviouslevels.

EUfundstotheUKCSOsin2016

WebroughttogetherthedatafromtheFTSwiththelistsofECHOgrantsmadetogenerateanoverallpictureoftheflowofdevelopmentandhumanitarianfundstoUKCSOs.TheoverallfigureofnewcommitmentstoUKCSOsfromEUdevelopmentandhumanitarianfundingsourcesin2016is€356.9m.ThisisbrokendowninFigure2.

020406080100120140160180200

2012 2013 2014 2015 2016

EurM

Figure1:ValueofnewgrantstoUKCSOsfromDGDevco(EurM)

Currentfundingsituation


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AnalysisbyCSOsize

ThesurveyofCSOs for this study received responses from60CSOs,and therefore isnotnecessarilyreflectiveofallUKCSOsreceivingfundingfromtheEC.However,thesurveyisusefulasanindicatorofthetypesoforganisationslikelytobeparticularlyaffectedbytheimpactofBrexitontheirfundingandprogrammes.

AnalysisbyCSO size (basedon turnover) reveals that themajorityof recipientsof funding from thedevelopmentfunding instrumentsaremediumto largerCSOs. Figure3,which isbasedonFTSdata,shows the number of organisations in each category of size (on the basis of annual turnover) thatreceived new funding commitments in 2016, shown by instrument. This reveals that the smallestorganisations(lessthan£1mturnover),accessfundingfromDCIandEIDHR,butdonotaccessfundingfromECHOortheEDF.

For humanitarian funding, thedata for ECHO reflect that it is the largerCSOs that have FrameworkPartnershipAgreements(FPAs)5withECHO,withtheexceptionofoneorganisationwhichfallsintothe£1mto£10mcategory.

5AFrameworkPartnershipAgreementsetstheprinciplesofpartnershipbetweenECHOandCSOs,definingroles,rightsandobligations.OnceCSOshaveagreedanFPAwithECHO,theyaretheneligibletoreceivefundingviaindividualgrantsthattheyapplyfor.

DCI,99.76

EIDHR,12.34

EDF,33.93

ECHO,210.89

Figure2:2016EUfundingtoUKCSOsbysourceandvalue(EurM)

DCI EIDHR EDF ECHO

0

10

20

30

DCI+EIDHR+IcSP ECHO EDF

Figure3:Numberoforganisanonsbysize(annualincome)recievingfundingfrommaininstruments

Lessthan£1m £1mto£10m Morethan£10m


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Using the survey responses,weanalysed the level towhichorganisationsare reliantonEU funding.Figure4suggeststhatthesmallerthesizeoftheCSO,thegreaterthepercentageofthatCSO’sincomecomes fromEU funding. 12 small tomedium sizedCSOs (less than£10m) reported that EU fundingmakesupmore than20%of theiroverall income.This suggests that,of those receivingEU funding,

smallerCSOstendtobemoredependentonEUfundingwithintheiroverallincome.

Analysisbygeography

Figure5.1showsthebreakdownofnewgrantsin2016intermsofgeographyfortheDCI,EIDHRandEDF instruments. This data shows a considerable concentration of funding in terms of number ofgrantsinEastAfrica,andWestAfrica.Figure5.2showsthesamedataforECHOhumanitariangrantsin2016–thisshowsagainaconcentration inEastandWestAfrica,howeverthegreatestnumberofnewECHOgrantsarefortheMiddleEastandNorthAfrica.

1917

9 86 5 4 3 3 3 2

02468

101214161820

EastAfrica WestAfrica

SouthernAfrica

LannAmerica

MiddleEastandNorthAfrica

SoutheastAsia

SouthernAsia

CarribeanPacific

CentralAsia

EastAsia EEuropeandtheEU

Fig5.1:Geographyofnewgrants(DCI,EIDHRandEDF)2016bynumber

0

5

10

15

20

25

Lessthan£100k £100kto£1m £1mto£10m Morethan£10m

Num

bero

fCSO

s

Fig4:EUfundingas%oftotalbudgetbyCSOsize

LESSTHAN20% 20-50% 50-80%


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The survey responses also supported this pattern: of the59Bondmemberswho responded to thesurvey,27haveEU-fundedprogrammes inEastAfrica, followedby21 inWestAfrica, and17 in theMiddleEast.

Analysisbysectoralbreakdown

Bysectoralbreakdown,EmergencyResponseisthemostfundedcategorywith151newgrantsto24UKCSOsthatholdFrameworkPartnershipAgreements.

UsingtheFTSdata,Figure6reflectsthesectoralbreakdownoftheDCIandEDFinstrumentsin2016,which shows thatafterECHO6, themost fundedsectorsaredemocracyandhuman rights,migrationand food security. This is a change from 2015, when democracy and human rights, civil societystrengtheningandhumandevelopmentwerethetopthreecategories.

6ECHOarenotshowninFigure6asthenumberofnewgrantsissomuchlargerthantheotherinstruments(151)

41

35

26

11 10 9 73 1

05

1015202530354045

MiddleEastandNorthAfrica

EastAfrica WestAfricaEEuropeandtheEU

SoutheastAsia

LannAmerica

SouthernAsia

CentralAsia CarribeanPacific

Fig5.2:Geographyofnewgrants(ECHO)2016bynumber

22

8 8 86 6 6

4 3 3

0

5

10

15

20

25

Fig6:SectorbreakdownofnewEUgrantsin2016bynumberofgrants(excludingECHO)


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EligibilitybyFundingStreamCurrenteligibilityrules,whichdeterminewhattypeoforganisationiseligibletoaccessEUfundingviaarangeofexistingEUfundinginstruments,allowustohighlightwhichpossibleroutestofundingmightstillbeopentoUKCSOsevenaftertheUKleavestheEU.TheyalsoprovideanindicationofwherethemajorvulnerabilitiesforUKCSOsmaybe.

Whileforeachfundinginstrumentspecificrulesofnationalityandoriginmayapply,theoverallruleforEU-budget funded programmes is broadly that the following organisations are eligible to receivefunding: organisations in EU, EEA, Pre-Accession or OECD-DAC ODA recipient countries, or OECDmembersworkinginLDCsandHIPCs.

Figure7givesanoverviewoftheeligibilityrulesrelevanttoUKCSOsbyInstrument.

Figure7:EligibilityofUKCSOsforEUfundingbyinstrumentBudgetLine

Rule

DCI • EU7• EEA• Non-EUOECDforLDCsandHighlyIndebtedPoorCountries(HIPCs8)only

ENI • EU• EEA(NoLDCs/HIPCsinENIregion)

EIDHR Norestrictionsofnationality

IcSP Norestrictionsofnationality

EDF • EU• EEA• Non-EUOECDforLDCsandHighlyIndebtedPoorCountries(HIPCs)only

ECHO • EU• EEA• RecognisedinanEUMemberStatethroughCouncilofEuropeConventionArticleNo.124• MainHQinEUMSorthirdcountryinreceiptofEUAid

The following discussion focuses on some specific instruments where there might be technicalloopholesandareasthatwillrequirefurtherclarification.Thesemay,intheory,offerUKCSOspossibleavenues for continued access to EU funds post-Brexit depending on the nature and degree ofpartnershipbetweentheUKandtheEU.

DevelopmentCooperationInstrument(DCI)

The DCI covers all countries on the ODA list of the OECD DAC except those covered by other EUgeographicalinstruments(e.g.ENI,EDFandIPA).DCIgeographiccallsarethuscurrentlyonlyforAsia,7Eligibilityforallfundinginstrumentsiswiderthanshowninthetable.OnlyeligibilitycategoriesrelevanttoUKCSOsareincluded.8HIPCsthatarenotalsoLDCsare:Bolivia,Cameroon,RepublicofCoCSO,Ghana,Honduras,IvoryCoastandNicaragua.


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CentralAsia,LatinAmerica,MiddleEast(eastofJordan)andSouthAfrica.Theeligibilityrulesforthisbudgetline,laidoutintheCommonImplementingRegulation,includeEUcountries,EEAcountries,andnon-EUOECDcountries(butonlyforworktobeimplementedinLDCsandHIPCs–outlinedinAnnex5).

This is a significant budget line for UK CSOs, accounting for 55% of new grants in 2016 (excludingECHO). Following Brexit, UK CSOs will be eligible for funding as non-EU OECD members only forprogrammesinLDCsandHIPCcountries.

• An area of clarification affecting DCI is around the rules of reciprocity. There is a provision foreligibilitytoincludecountriesforwhichreciprocalaccesstoexternalassistanceisestablished.TheEUcould, intheory,grantcontinuedaccesstoEUfundingpost-Brexit forUKCSOs ifallsimilarUKAidinstrumentsandprogrammeswereequallyaccessibletoentitiesfromtheEU.

EuropeanDevelopmentFund(EDF)

TheEDFisthelargestinstrumentforfundingEUdevelopmentcooperationandwasasourceofalmost€34m Euros of aid to UK CSOs in 2016. It is governed by the Cotonou Agreement, and its primaryobjectiveispovertyreductionintheAfrican,CaribbeanandPacificGroupofStates(ACP),ofwhichoverhalfaremembersoftheCommonwealth.

UnliketheEU‘sotherfundinginstruments,theEDFisnotpartofitsgeneralbudgetandtheEuropeanParliamenthasnoofficialscrutinyovertheEDF’sbudgetorpriorities.Eligibility9fortheEDFissimilartothatforDCI,includingEUandEEAstates,aswellasOECDcountriesforprojectstobeimplementedinLDCsandHIPCs.

The11thEDF,createdbyanintergovernmentalagreementsignedinJune2013andenteredintoforceonthe1March2015,coverstheperiod2014-2020.TheUKhasalreadymadefinancialcommitmentstothisfund.However,nofundspledgedtothe11thEDFhavebeencalledforfrommemberstatesyet.Thefirstsuchcallforcontributionsisexpectedinthemiddleof2017withothercallscontinuinguntilwellafterthedeadlineforcommitmentsinDecember2020.

MaintenanceoftheUK’scommitmenttotheEDFwillbethesubjectofearlystagenegotiationswiththeEU27,whichareexpectedtofocusonafinancialsettlementwiththeUK.

• IftheUKdoescontributefunds,thismayresultinUKCSOsremainingeligibleforfundingforthefullperiodof the11thEDF. Furthermore, as theEDF is currentlynotpartof thegeneral EUbudget,theremaybeacasefortheUKtocontinuetopayintotheFundevenafterit leavestheEUiftheEDFremains“out-of-budget”.

• TherulesofreciprocityoutlinedabovealsoapplytotheEDF.Anotherpossibleavenueforsecuringlonger-termeligibilityforUKCSOstofundsundertheEDFmightbetograntaccesstobothEUandACPentitiestoUKdevelopmentorhumanitarianfinancingaspartofareciprocalaccessagreementalongthelinesofwhathasbeendiscussedfortheDCI.

EuropeanCivilProtectionandHumanitarianAidOperations(ECHO)

EligibilityforECHOFPAsisrestrictedtoCSOsregisteredinanEUmemberorEEAstate,orrecognisedinanEUMemberStatethroughtheCouncilofEuropeConventionNo.124of24April1986.Inpractice,CSOs fromonly twocountrieshavebeenrecognisedthroughConvention124 - SwitzerlandandFYRMacedonia-andsothisrouteisnotwelltestedandlikelytobesubjecttopoliticalnegotiation.ThereisafurtherrequirementthatanFPAholdermusthaveitsmainheadquartersinanEUMemberStateor

9EligibilityisprovidedforinArticle20ofAnnexIVoftheCotonouAgreement,asamendedbyDecision1/2014oftheACP-EUCouncilofMinisters(Doc2014/428/EU).


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athirdcountrythatisarecipientofEUAidformorethanthreeyearsbeforetheyareeligible.

ThecurrentECHOFPAs run to2018.Thereare inevitablyconcernsaboutwhatwillhappenwith thenegotiation of new FPAs. These discussions are starting now and UK CSOs, which are some of thelargest recipients of ECHO funding, find themselves in an unclear position resulting from theuncertaintiesofBrexit.TherearepossibilitiesforUKCSOstoreceivecontinuedfundingfromECHO:

• TheuntyingofECHOfundingtoallowfornon-EUdonors to“pitch in” isonepossibility toensurecontinuedeligibilityofUKCSOs.

• AfurtherareaofenquiryinrelationtoECHOrelatestoAssignedRevenues.Overtheperiod2015-2017 DFID has committed funding of up to £139m for the Providing Humanitarian Assistance toSahelEmergencies(PHASE)programme10.ThemajorityofthisfundingisbeingdeployedthroughaContributionAgreementwithECHO,withimplementationhavingcommencedinJanuary2015.TheUK'sassignedcontributionstothePHASEprogrammecouldprovideamodelforfuture,post-Brexit,areasofcooperation.

• The potential to test the Convention 124 route may also be an option, depending on politicalnegotiations.Onepoint to consider is that if theUKwere to eventually optoutof the EuropeanConvention on Human Rights and leave the Council of Europe, the Convention 124 avenue foreligibilitywouldalsobeinexorablyclosed.

TrustFunds

The channelling of EU development aid through Trust Funds is an increasing trend. During 2014-15three Trust Fundswere launched11. They now account for a total €2.3 billion from the EDF and EUbudgets,inadditiontoEUmember-statecontributions.Eligibility for these Trust Funds is variable, and in general terms much wider than for otherinstruments.Forexample,eligibilityfortheBekouFundisopenwithoutrestriction12.TrustFundshavethepotentialtobeasignificantsourceoffundingpost-Brexit.However,TrustFundshavecomeunderheavycriticism13forlackoftransparencyandopenness;directimplementationbyEUdirectorateswhichby-passes localgovernmentandcivilsociety;anddivertinglong-termdevelopmentfundstohumanitarianemergencies.

Nonetheless, Trust Funds do represent amore flexiblemodel, allowing countries to choose to poolfunds to address a particular crisis or situation. Someof the larger, or humanitarian focussed, CSOsinterviewedexplained that theyhavebeenan important sourceof funding.These fundshaveso farmostlybenefitedthelargestCSOs.Insummary:

• TrustFundscouldofferavaluableavenuefortheUKtocontributetosharedglobalandEuropeanchallengesandcrisesonceitleavestheEU.PushingforfurtheruntyingofEUaidandreachingouttonon-EU donors (e.g. Norway and Switzerland) are actions currently being prioritised by theCommission's Director General for Development Cooperation. Bringingmore donors to the tablewould open it up to being broader than solely EU donors investing in EU trust funds.

10https://devtracker.dfid.gov.uk/projects/GB-1-204439/documents11TheEmergencyTrustFundforAfrica(EUAfricaTrustFund);theEUBekouTrustFundfortheCentralAfricanRepublic(EUCARorBekouTrustFund–2014);andtheEURegionalTrustFundforSyria(MadadFund–2014).12Bêkouwasthefirstmulti-donorEUTrustFund,establishedon15July2014bytheEUandthreeMemberStates(France,GermanyandtheNetherlands).ItaimstopromotethestabilisationandreconstructionoftheCentralAfricanRepublic.Ithasbeenestablishedforamaximumdurationof60monthsinordertoprovideamedium-termresponse.https://ec.europa.eu/europeaid/bekou-trust-fund-introduction_en13Forexample,seeConcord’s2016AidWatchreport:https://concordeurope.org/wp-content/uploads/2016/10/CONCORD_AidWatch_Report_2016_web.pdf?de2aba

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