"Brexit and EU Funding" by GRIN

Jun 26, 2016

This is an issue that is close to the heart of the GRIN household, with GRIN partner Dominie managing two European funded grant schemes, the LEADER programmes Making It Local and REAL Devon.

We’ve been trying to work out what the impact of the referendum’s outcome to leave the European Union will be on European funding. The issue’s been touched on here and there in the national press, most recently in Cornwall Council’s (and others, according to Sky News) call for the government to protect its European funding, which has been worth £60 million a year to the county over the last 10 years. This is a figure that recognises Cornwall’s weak economy in comparison to other parts of the UK and, indeed, Europe (side-note: one of the more interesting results of the referendum was that, while Cornwall voted ‘Leave’, the Isles of Scilly voted to ‘Remain’).

While we expect LEADER funding, worth £138 million across the UK for the period 2015-2020, to be honoured for the current funding term, the likelihood of any continuation funding beyond the end of the decade looks remote. This is likely to have a creeping impact on the current programme as established regeneration agencies will look to review their post-2020 role, while experienced regeneration officers  will be wondering what their next moves should be (expect an increase in the number of consultancies springing up across the UK).

Brexit is also likely to have consequences for Local Enterprise Partnerships (LEPs), which have been charged with managing European Structural and Investment Funds (ESIF). ESIF comprises the European Regional Development Fund (ERDF), the European Social Fund (ESF) and the European Agricultural Fund for Rural Development (EAFRD). Much will depend on the exit negotiations with the EU as to how and whether these schemes will continue, but this is likely to be a protracted process with an interim risk that uncertainty in the future of ESIF will undermine confidence in the programme.

We suspect one outcome of the vote to leave the EU will be a re-evaluation of the role of LEPs, which may find a stronger function in being a conduit for decentralisation as calls for regional governance are likely to be stepped up. We may yet see LEPs evolve into a new Regional Development Agency, a prospect that is hardly likely to fill South West communities with joy.

Other European funding streams such as ERASMUS PLUS, HORIZON 2020 and CREATIVE EUROPE may continue to be open to UK applications depending on the government’s funding commitment to these schemes, but their future may well be in doubt, certainly beyond 2020 if not before, with a corresponding decrease in research and innovation, the safeguarding and promotion of European culture, education, training, sport and youth initiatives.

It remains to be seen how the post-Cameron government responds to these issues. It looks as though European funding available to the UK will inevitably diminish, if not completely disappear, while regions lobby for the government to match lost funding with new investment, released through savings from EU contributions and directed through the LEPs. This sounds too simple, however, and we expect the direction of travel to be much more complex, confused and uncertain.

On a salutary final note, we urge observers to be wary of articles such as this BBC item on Vote Leave wanting to protect European funding. As the Daily Telegraph has acknowledged, all politicians are destined to lie because they feel compelled to say things they believe their audience needs to hear. The real truth is in the corresponding actions and, as we should know by now, when it comes to the polical elite, actions speak louder than words.

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