With Brexit looming, many of our clients have been asking questions about possible changes to EU funding streams and how it could affect them. It is clear that there will be changes to funding, whether that be grants or loans, and this blog aims to answer a few of the key questions being asked.
What is the UK’s current funding situation?
The UK currently receives funding from the EU through a variety of channels; the bulk is in partnership with national or regional member states, although a share is received directly from the European Commission. Between 2010-2017, the UK was one of the nine net contributors to the EU budget, supplying more to the EU budget than we have been receiving in funding), contributing an average of €9.2 billion each year and receiving an average €6.8 billion.
The UK will continue to receive funding as normal from the EU until it ceases to be a member state ( & possibly beyond Brexit depending on the Withdrawal Agreement). The UK government has also guaranteed that recipients of any EU funding secured until the end of 2020 will continue to receive their money, even if no deal is reached. So short-mid term, everything is going to continue as normal.
The big question is – What will happen long term once we have left the EU? Funding streams and potential outcomes are explained below:
European Structural and Investment Fund (EIS): The UK will be eligible to continue receiving this until the end of 2020 in the same way that it does today. Once the UK leaves the EU, this funding will ceased to exist. There is as yet no firm replacement, however the 2017 Conservative Manifesto does include this statement on replacement of the funds: “We will use the structural fund money that comes back to the UK following Brexit to create a United Kingdom Shared Prosperity Fund”.
Direct Funding: Direct funding will also continue as usual until the end of 2020 and/or until the lifetime of those programmes. Following this, administrators of direct funding do have provisions set aside for non-member states wishing to participate. For example under the rules of Horizon 2020, the UK could qualify as an Associated Country. Regulations for other direct funds (e.g. COSME) have similar provisions that would allow the UK to access funding under particular categories.
European Investment Bank (EIB): A government statement has assured “The UK is and continues to be a shareholder of the European Investment Bank (EIB), and the EIB has publicly stated that its engagement in the UK is unchanged. All existing loan contracts signed between UK promoters and the EIB remain in force, and the EIB has continued to sign and approve new projects since the EU referendum.”
This being said, after Brexit, any lending to the UK would have to be agreed by the EIB’s board of governors (finance ministers). Therefore funding would remain possible, as between 2011-2015, 11% of total EIB investment was spent outside the EU.
In summary, the short term impact is minimal with funds continuing as normal until the end of 2020. Funding opportunities thereafter are not guaranteed but many will remain accessible, along with government plans to fill any funding gaps created by Brexit.
We will also continue to have all UK based grant streams such as Innovate UK and they continue to fund at a healthy rate as we write.
Would you like any more information on EU grants or other funding opportunities? Contact us on 01535 613333 or email@example.com