The Welsh government has criticised UK government’s EU replacement funding allocation and its “chaotic implementation” of the Shared Prosperity Fund, after a charity was forced to close this week.
Chwarae Teg, a gender equality charity, announced its closure this week after 31 years following a failed appeal to the Welsh government for financial support after its loss of European funding.
The charity received most of its income from the Wales European Funding Office’s European Structural Fund in recent years, according to Charity Commission data, with this source accounting for £2.24m of the charity’s total income of £3.03m in the year to March 2022.
In a statement, the Welsh government paid tribute to the charity, which it said had “touched the lives of women across Wales, given them a voice and provided the Welsh government with the insight and evidence necessary to make strides to deliver real change”.
“Sadly, this is an example of how UK government policies impact on organisations in Wales,” a spokesperson for the devolved administration said.
“As a direct result of Westminster's approach to the Shared Prosperity Fund, the entire allocation to Wales is £1.1bn less compared to EU structural and rural funds, which has only been exacerbated by UK government delays and chaotic implementation, putting local authorities under huge pressure and damaging key sectors of our economy.”
In response, a UK government spokesperson denied a reduction in funding to the Welsh government.
“We are matching the levels of investment Wales would have received under European Structural Funds,” a spokesperson said.
“Working with local authorities and partners from across the private, public and third sectors, we are supporting a range of projects backed by £585m being invested across Wales through the Shared Prosperity Fund.
“We are working closely with local partners and the Wales Council for Voluntary Action to consider how projects due to be delivered by Chwarae Teg can be maintained.”
During a parliamentary debate on the closure of the charity this week, MPs questioned whether more could have been done to help the charity.
In December last year, the government confirmed it would begin distributing EU replacement funding to local authorities through the UK Shared Prosperity Fund after charity bodies had criticised delays.
Trading subsidiary in liquidation
Chair of the charity, Sharon Williams, said in a statement this week that financial constraints led to the closure and that it is aiming to see if its work might be able to be delivered elsewhere.
Williams said: “Despite the best efforts of the recently appointed new leadership team, a perfect storm of financial challenges has left no other option available.”
Accounts show the charity had around 65 staff, and Williams said staff have been kept informed of the developing situation and are now amid a collective redundancy consultation.
In total, there are now 23 people who will be made redundant, as 24 were made redundant in May. Some staff have left and were not replaced, and there were a few staff on fixed term contracts.
In her statement, the chair explained with the pending loss of European funding, in 2019 Chwarae Teg set up its commercial arm, FairPlay Trading, with the aim of securing a new funding stream for the charity.
Although this has delivered successful projects empowering equality across Wales, it never became profitable.
“Last week we took the decision to put FairPlay Trading into liquidation. We have also recently been informed by the Wales European Funding Office that the charity received an historic advance payment which must now be addressed,” said Williams.
“Combined with the difficult economic situation facing all charities this has left Chwarae Teg over-exposed financially. In order to do the right thing for our staff, clients and other stakeholders, controlled closure is now our only viable option.”
An approach to the Welsh government for a rescue package has been unsuccessful, the chair said.
“We recognise this is desperately sad news for our staff, funders and clients – but above all for the women of Wales who we have been so proud to serve over so many years,” she said.
“The team has recently secured a number of new contracts, which showed that the need for our work is as great as ever whilst signalling a sustainable future for the charity. Unfortunately, we have simply been unable to overcome this current financial crisis.
“We are working with other charities and partners to see if some of Chwarae Teg’s current work streams can be delivered by other agencies.”
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