Charities 'may lose £200m in EU funding' after Brexit

Charities which are "the lifeblood of society" are expected to lose £200 million in EU funding when Britain leave the Union, a parliamentary committee has warned.

The House of Lords Committee on Charities said innovative small charities could be the worst hit because they are already under financial pressure

Many charities receive money from EU structural and investment funds - in particular the European social fund (ESF) provides important funding for charities.

In evidence to the committee, the Royal Mencap Society described the ESF as a "major source of revenue" helping to raise living standards and provide job opportunities for young people and the long-term unemployed.

Medical research charities also raised concerns about losing EU funding and opportunities for collaboration after Brexit, such as through the Horizon 2020 innovation programme.

Civil society minister Rob Wilson told the committee the government was listening to charities' concerns and said if they can show "strong value for money" they will continue to be funded.

But the peers called on the Office for Civil Society to audit the potential impact of Brexit on charities, including the loss of funding and research collaboration, and publish a report by the end of the year.

Committee chairman Baroness Pitkeathley said: "Charities are the lifeblood of society. They play a fundamental role in our civil life and do so despite facing a multitude of challenges. Yet for them to continue to flourish, it is clear that they must be supported and promoted."

The Local Government Association urged charities to engage with devolution of powers to councils as it will give them "considerable" opportunities.