News story

Chancellor Philip Hammond guarantees EU funding beyond date UK leaves the EU

British businesses and universities will have certainty over future funding and should continue to bid for competitive EU funds while the UK remains a member of the EU.

Thousands of British organisations will receive guarantees over EU funding in a new move by Chancellor Philip Hammond today (13 August 2016).

Key projects supporting economic development across the UK will be given the green light, ending uncertainty over their future following the UK’s decision to leave the European Union.

Assurances set out by the Treasury include:

  • all structural and investment fund projects, including agri-environment schemes, signed before the Autumn Statement will be fully funded, even when these projects continue beyond the UK’s departure from the EU

  • the Treasury will also put in place arrangements for assessing whether to guarantee funding for specific structural and investment fund projects that might be signed after the Autumn Statement, but while we remain a member of the EU. Further details will be provided ahead of the Autumn Statement

  • where UK organisations bid directly to the European Commission on a competitive basis for EU funding projects while we are still a member of the EU, for example universities participating in Horizon 2020, the Treasury will underwrite the payments of such awards, even when specific projects continue beyond the UK’s departure from the EU

As a result, British businesses and universities will have certainty over future funding and should continue to bid for competitive EU funds while the UK remains a member of the EU.

And in a new boost to the UK’s agricultural sector Mr Hammond also guaranteed that the current level of agricultural funding under CAP Pillar 1 will be upheld until 2020, as part of the transition to new domestic arrangements.

The Chief Secretary to the Treasury, David Gauke, has also written to each devolved administration to confirm the same level of assurances offered to UK government departments in relation to programmes they administer but for which they are expected to rely on EU funding.

The Treasury will work closely with the devolved administrations on subsequent funding arrangements to allow them to prioritise projects within their devolved responsibilities.

Chancellor of the Exchequer, Philip Hammond said:

The UK will continue to have all of the rights, obligations and benefits that membership brings, including receiving European funding, up until the point we leave the EU.

We recognise that many organisations across the UK which are in receipt of EU funding, or expect to start receiving funding, want reassurance about the flow of funding they will receive.

That is why I am confirming that structural and investment funds projects signed before the Autumn Statement and Horizon research funding granted before we leave the EU will be guaranteed by the Treasury after we leave. The government will also match the current level of agricultural funding until 2020, providing certainty to our agricultural community, which play a vital role in our country.

We are determined to ensure that people have stability and certainty in the period leading up to our departure from the EU and that we use the opportunities that departure presents to determine our own priorities.

Environment Secretary, Andrea Leadsom said:

This guarantee of funding is excellent news for our farmers and our environment.

It means farmers are assured of current levels of funding until 2020 and any agri-environment schemes agreed before the Autumn Statement will be fully funded – even when these projects continue beyond the UK’s departure from the EU.

I’m delighted we can provide this crucial certainty and continuity to our rural communities while we develop a new approach to supporting agriculture and protecting our precious countryside.

Food and farming are central to our national identity and together they are a bedrock of our economy, generating over £100 billion a year and employing one in eight people.

I look forward to working with the industry, rural communities and the wider public to shape our plans for food, farming and the environment outside the EU.

Local Government Secretary, Sajid Javid said:

Local Enterprise Partnerships are a vital part of our efforts to rebalance the economy, and have helped create thousands of jobs over the past five years.

Guaranteeing EU funding will further support this work by enabling them to plan ahead with certainty so businesses, universities and local authorities across the country can enable economic growth

This will be crucial as we work together to take advantage of the opportunities presented by the UK’s decision to leave the European Union.

Business and Energy Secretary, Greg Clark said:

The government’s commitment to our world-leading science and research base remains steadfast. By underwriting the significant Horizon 2020 grants we are showing the extent of our commitment, standing squarely behind our researchers and scientists as they continue working with their European partners to develop new technologies, discover life-saving medicines and pioneer every day innovations that will benefit all hard-working Britons.

Secretary of State for Work and Pensions, Damian Green said:

The fund supports hundreds of initiatives across England like the Ways to Work programme in Liverpool, which is helping disadvantaged people in the area to gain new skills and turn their lives around for the better. With this decision, providers can plan with certainty and help more people gain the security and dignity of work.

Secretary of State for Exiting the European Union, David Davis said:

This announcement shows that the government is ensuring that those people and organisations currently supported by EU funding can continue to benefit from a measure of continuity. This will offer reassurance to them, and help ease the transition to our new relationship with the EU.

Further information

The Chief Secretary to the Treasury, David Gauke, has written to the Secretary of State for Exiting the European Union, David Davis, setting out the steps that the Treasury will be taking to guarantee funding streams.

The Chief Secretary has also written to the finance ministers of the devolved administrations in similar terms.

The Chancellor, Philip Hammond, has written to the Chairman of the Treasury Committee, Andrew Tyrie, to confirm these arrangements.

The structural and investment subject to these assurances include:

  • The European Agricultural Fund for Rural Development – CAP Pillar 2
  • The European Social Fund
  • The European Maritime and Fisheries Fund
  • The European Regional Development Fund including European Territorial Cooperation

The following government departments lead on each of the EU funded schemes:

  • Department for Environment Food and Rural Affairs: CAP Pillar 1 and 2 and the European Maritime and Fisheries Fund

  • Department for Business, Energy and Industrial Strategy: Local Enterprise Partnerships, Horizon 2020; European Regional Development Fund (UK-wide) European Social Fund (UK-wide)

  • Department for Communities and Local Government: The European Regional Development Fund including European Territorial Cooperation (in England)

  • Department for Work and Pensions: The European Social Fund (in England)

A breakdown of example projects across the country that have received, or are due to receive, funding from the European Regional Development Fund, which the UK government is now providing reassurance for:

Midlands – Manufacturing Growth Programme

£9m of ERDF funding will span 16 LEP areas across the East Midlands, West Midlands, Yorkshire and Humber and East of England. The project will provides tailored support to manufacturers supporting a large employment base. The MGP service will provide locally-focused front-line teams to provide business and specialist manufacturing advice to support manufacturers to improve and grow.

Reading – Thames Valley Science Park

£5 million of ERDF. A Thames Valley Berkshire LEP area project which will deliver the first building (Gateway Building) of the Reading University Science Park providing facilities conducive to the growth of innovative technology based companies, particularly those participating in research and development, and product development.

Cornwall – Carluddon Technology Park

£6.2 million of ERDF. This project will build on previous ERDF investment, unlocking a key gateway employment site on the main A391 road into St Austell, Cornwall. The project will provide high quality workspace and lead to the creation of high quality, high value jobs in the low carbon environmental goods and services sector, supporting Cornwall and Isles of Scilly’s aspirations of becoming an industry leader in environmental technologies (land and marine).

North East – Tees Valley Compass and Business Fund

The project will run until the end of 2019 and is expected to deliver 800 new jobs and around £15 million in private sector investment.

Yorkshire – The Royce Translational Centre at the Advanced Manufacturing Park, Rotherham

A new 1,000m2 innovation facility will be delivered with £4 million of ERDF funding will deliver. This is expected to support growth and innovation in companies employing over 13,800 people and is estimated to generate £668 million in the Sheffield City Region.

Manchester – Graphene Engineering Innovation Centre

£5 million of ERDF funding for the University of Manchester centre, in the North Campus. It will fund equipment needed for a new facility which will exploit and maintain the UK’s world-leading position in graphene and related 2-D materials. The GEIC will allow the acceleration of application research and development in partnership with industry and other research organisations. The facility will complement the £23 million ERDF 2007-13 investment in the National Graphene Institute, where currently over 200 scientists and engineers work.

East Anglia – SCORE – The Supply Chain Innovation in Offshore Renewable Energy – New Anglia

Based in Lowestoft, Suffolk the project is a £6 million fund that will support 200 businesses to develop new and innovative technologies in the offshore renewable energy sector. This will range from supporting the supply chain and innovation needs of local businesses with the capabilities to diversify into the offshore renewable energy industry. It’s expected to stimulate more than £3 million of private sector investment, strengthening business, research and university collaborations.

Swindon and Wiltshire – Porton Science Park

A new 3870sqm health and life sciences incubation and innovation centre at Porton Down, Wiltshire is being supported by £3 million of ERDF. The £6.86 million project will provide flexible lab space and office facilities for SMEs, along with new and growing enterprises in Wiltshire. It’s being led by Wiltshire Council and will create over 200 full time equivalent jobs locally, as well as bring opportunities for advanced skills training in the bioscience sector.

Published 13 August 2016