UK NGOs head for Europe as Brexit looms

LONDON — British NGOs are opening up offices and strengthening their presence across Europe in the run-up to Brexit, creating an “inevitable danger” that British aid expertise could be lost, according to international development network Bond.

Devex has spoken to NGOs that have registered or are considering registering in the Netherlands, Belgium, Ireland, or Germany in order to maintain access to EU funding.

It remains unclear how Brexit will impact European Union funding for U.K. NGOs. U.K. development organizations received €356 million ($405.9 million) through the EU in 2016 and the U.K.’s exit in March 2019 could leave them with significant funding gaps, a report from Bond revealed last year.

After Brexit in March 2019, the U.K. has suggested the EU make its aid financing instruments open to “third countries,” so non-EU members can still participate in certain programs. “But much depends on what happens over the coming months,” according to Claire Godfrey, Bond’s head of policy and campaigns.

Some U.K.-based NGOs say they cannot afford to risk it.

International Alert opened an office in The Hague earlier this month. Although there were various considerations, “if it wasn’t for Brexit, then we wouldn’t have done it. That’s definitely the driver,” said Debbie Ball, head of fundraising at IA.

“I’ve probably spoken to about 10 different organizations considering opening up new offices,” she added. “It’s the small- and medium-sized organizations that are going, because bigger ones are federated,” meaning they are likely to already have a legal presence elsewhere in Europe.

The new office means IA’s U.K. operation will be forced to slim down. “We can’t have two head offices at the same time and not change the size,” Ball said. “We want the total number of staff across the offices to be the same, so there will be less in the U.K. As employees leave, we’ll see if that post can be staffed in The Hague.”

Mercy Corps has also set up an office in The Hague, in large part to ensure continued access to EU funding. “We were conscious of the limits in our ability to influence without a presence in or near key European capitals,” Simon O'Connell, executive director, said.

Other international development organizations are firming up existing European connections. DAI, a major contractor to the U.K.'s Department for International Development, registered in Brussels, Belgium, in July 2016, shortly after the vote on Brexit. Although the idea predated the referendum, the result of the vote prompted DAI to create the office as a subsidiary — meaning it is legally a separate and independent business — rather than a branch.

Tenders for many EU aid projects require organizations to be based in the EU, or in a country that has a special arrangement with it, meaning the eligibility of U.K.-based organizations after Brexit remains in doubt.

DAI is now putting all its bids for EU funding through the Brussels office. “New invitations to tender [from the EU institutions] started to reference that if a U.K. organization is successful in winning work, it would be reconsidered after Brexit,” Christopher Lockett, managing director of DAI Europe, explained. “So we decided to bid anything new through the Brussels entity and the legacy contracts we have here [in the U.K.] will just wind down.”

Choosing a base

Berlin, Amsterdam, Dublin, and The Hague were all cited as contenders for offices by U.K. organizations.

The Wellcome Trust set up an office in Berlin, Germany, in January, which will be staffed by a small team. The trust had existing connections with Germany but the base will “inform our perspective on how institutions can continue to partner and collaborate effectively after the U.K. leaves the EU,” Ed Whiting, director of policy, told Devex, adding that “Berlin is recognized as a leading center for health, science, innovation, and culture.”

DAI chose Brussels because “we decided that if we were going to set up a European operation then we should be at the center of Europe,” Lockett said. He cited proximity to the European Commission as key, although they also considered Ireland, Holland, France, and Germany.

“Unfortunately, Brussels is an enormously expensive place to employ people,” he explained. “If you’re just looking to have a European postbox, there are considerably cheaper places.”

The Hague is one of those, and it is proving a popular option.

IA’s Ball said it was “fairly obvious early on” that the Dutch administrative capital was the front-runner for the NGO. Home to various international organizations, it touts itself as “the city of peace and justice” and has been proactive in encouraging NGOs to set up there.

“They reached out to us,” Ball explained, and “through The Hague Business Agency we gained access to lawyers, banks, potential partners, and potential funders, as well as an understanding of what the operating environment is like.”

The Hague municipality also gave IA a grant to support the setup, which was the clincher, Ball said. “It feels like a community for the NGO world that’s growing,” she added.

Mercy Corps’ O’Connell agreed. “From an administrative perspective, the Netherlands has a comparatively easy-to-navigate bureaucracy and legal framework for registration, as well as an English-speaking work environment … It is also particularly welcoming to NGOs,” he said.

A spokesperson for the Ministry of Foreign Affairs in the Netherlands denied “actively approaching” NGOs for relocation to The Hague but said, “the Netherlands does welcome any NGO that considers it as a place of business.”

For many organizations, opening up an EU office before March 2019 is a way of insuring themselves amid ongoing uncertainty. “The board felt that the best way to avoid [the threat of losing EU funding] was to have the European office set up,” Ball said. “And we knew it would take a long time because we’re small and don’t have lots of resources. We wanted to be ahead of the game, basically… From start to finish, it took us six months to get registered. So far it’s cost around £20,000 [$25,600] and most of that has gone to legal fees.”

Opportunity International, which has put aside £8,000 to set up an office in The Hague, offered similar reasons. “If whatever comes out of Brexit determines [that the office] is not needed, the cost involved was so minimal, we felt it was a risk worth taking,” said Deborah Foy, special adviser to the CEO.

But if the trend continues, and a large number of U.K.-based NGOs set up or prioritize operations in Europe, there is a risk of losing British expertise in aid work, Bond’s Godfrey warned.

“Right now, the U.K. has sought-after expertise and a global reputation for delivering quality aid and development programs, because we have a strong legacy of experience in terms of delivery, effectiveness, and transparency which is yet to be matched,” she explained.

“If we see a large number of NGOs setting up offices in Europe post-Brexit there is the inevitable danger that the expertise the British NGOs have will also move … If there is a downscaling of presence in the U.K., the influence U.K. civil society currently has in ... public policy debates, and their influence and impact at a program level will diminish.”

Over the coming weeks, as the U.K. prepares to leave the European Union, Devex will be exploring the impact of Brexit on aid. Read about what’s at stake for aid in the Brexit deal; whether the U.K. could continue contributing to EU aid projects; and the war of words over U.K. organizations’ access to EU funding. If there are topics you’d like to see covered, tell us in the comments below.