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

Author (Corporate)
Series Title
Series Details 13.08.16
Publication Date 13/08/2016
Content Type

HM Treasury (Ministry of Finance of the United Kingdom) confirmed in a letter to the Secretary of State for Exiting the European Union, other government departments and the devolved administrations in the UK that universities, farmers and many other businesses would have certainty over future funding and should continue to bid for competitive EU funds while the UK remained a member of the EU.

Key projects supporting economic development across the UK would be given the green light, ending uncertainty over their future following the UK’s decision in June 2016 to leave the European Union.

Assurances set out by the Treasury included:

+ all structural and investment fund projects, including agri-environment schemes, signed before the 2016 Autumn Statement would be fully funded, even when these projects continued beyond the UK’s departure from the EU

+ the Treasury would 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 remained a member of the EU. Further details would 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 were still a member of the EU, for example universities participating in Horizon 2020, the Treasury would underwrite the payments of such awards, even when specific projects continued beyond the UK’s departure from the EU

+ in a new boost to the UK’s agricultural sector HM Treasury also guaranteed that the existing level of agricultural funding under CAP Pillar 1 would be upheld until 2020, as part of the transition to new domestic arrangements.

The cost to the UK taxpayer would be approximately £4.5bn(€5.2bn) a year. The measures were only transitional stop gaps until the UK had set up its own structures and policies to deliver the policy objectives previously provided by EU funding.

Responding to the UK Government's EU funding announcement, Lord Porter, Chairman of the Local Government Association, said:

'The Government's commitment to honour existing agreed projects reliant on EU money and those signed-off by the Autumn Statement will help get some vital growth-boosting schemes off the ground across the country.

However, as welcome as this commitment is, it falls well short of the full guarantee we are urging the Government to make. Local areas need certainty around the future of all of the £5.3 billion in EU regeneration funding promised to them by 2020. The continued uncertainty risks damaging local regeneration plans and stalling flagship infrastructure projects, employment and skills schemes and local growth'.

The National Farmers Union (NFU) and Country Landowners Association (CLA) responded positively to the announcement.

Leaders politicians in the Northern Ireland, Scottish and Welsh devolved administrations said the measures did not go far enough.

At the Labour Party Conference in Liverpool Shadow foreign secretary Emily Thornberry said on the 26 September 2016 that a future Labour government would replace any regional funding shortfalls caused by Brexit 'into the 2020s and beyond'.

Following the announcement in August 2016, which guaranteed funds for projects signed up until the Autumn 2016 Statement, the Chancellor of the Exchequer on the 3 October 2016 extended this guarantee to the point at which the UK departed the EU.

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Related Links
Deutsche Welle, 13.08.16: UK government pledges to plug funding gaps after Brexit
BBC News, 13.08.16: Brexit: Government guarantee for post-EU funds
The Guardian, 13.08.16: Treasury to guarantee post-Brexit funding for EU-backed projects
ESO: In Focus: Brexit - The United Kingdom and the European Union
ESO: Background information: NFU launches biggest farming consultation for a generation post-Brexit
ESO: Background information: Universities UK statement on the outcome of the EU referendum
Local Government Association: News, 13.08.16: LGA responds to Government EU funding announcement
National Farmers Union: News, 13.08.16: NFU says announcement from Treasury is 'positive'
Country Land and Business Association: News, 13.08.16: Decision on farm payments welcomed by CLA as vital first step in planning for EU exit
Scotland: Government: News, 13.08.16: Clarity sought over EU funds
Wales: Government: News, 13.08.16: Statement by the First Minister of Wales on the UK Government’s announcement on EU funds
Politico, 13.08.16: UK vows to plug EU funding gaps for farmers and scientists
Universities UK: News, 13.08.16: UUK responds to EU funding announcement by Chancellor
In Facts, 14.08.16: Pledge for science and farming offers stopgap not solution
BBC News, 26.09.16: Labour will 'replace post-Brexit EU funding' in UK
UK: HM Treasury: News, 03.10.16: Further certainty on EU funding for hundreds of British projects
Conservative Home, 03.10.16: May’s vision – not soft, not hard, just Brexit

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