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Can we save the research and innovation projects currently supported by European structural funds?
Last updated on Wednesday 1 Mar 2023 at 10:44am
The new year saw both the Prime Minister and Leader of the Opposition set out their ambitions for the country, with both identifying the critical role of research and innovation (R&I) in addressing the challenges the country is facing.
It is heartening to see their acknowledgement of the crucial role universities have in driving innovation, which in turn leads to the creation of new businesses, new jobs, and improving wages.
However, over the coming weeks and months, we will begin to see 166 university led R&I projects across the UK put at risk as EU structural funding comes to an end. This contradiction appears to result of a lack of joined up thinking in UK government more than any strategic decision-making.
What impact will the end of EU funding have?
A significant consequence of Brexit is that European funding for R&I in the UK will come to an end. Most of these R&I collaborations were funded through framework programmes such as Horizon Europe, the world’s largest R&I funding scheme.
A significant consequence of Brexit is that European funding for R&I in the UK will come to an end.
In addition, a sizable number of R&I projects were also funded through European Structural and Investment Funds (ESIF). In the UK, £3.7 billion was invested through ESIF, specifically the European Regional development fund (ERDF), in R&I projects between 2014 and 2020. Of this £3.7 billion, £576 million was for university led R&I projects in England and £376m in Wales.
Why are we at this point?
The position of the UK government, and Universities UK, is that we still hope to associate with Horizon Europe, and this should become a reality if enough progress can be made in ongoing discussions on the Northern Ireland protocol.
To the UK government’s credit, the Department for Business, Energy and Industrial Strategy (BEIS) has put considerable effort into designing a credible and ambitious UK alternative (Plan B), to use the £6 billion that has been set aside for association in support of R&I if that fails to materialise.
In stark contrast, no effort has been put into ensuring innovation projects funded by ESIF can continue. Primarily, it seems, this is because funds that would have been provided to Europe – and are now allocated through the UK Shared Prosperity Fund (UKSPF) – sit in the Department for Levelling Up, Housing and Communities (DLUHC) which has neither responsibility for, nor expertise in, R&I.
What’s the risk?
As many as 166 ERDF R&I projects across the UK are rapidly reaching the cliff edge this year when EU funding ends and no alternatives are available. These projects deliver on areas the UK Government has rightly identified as top priority, such as ‘digital transformation’, ‘the push to Net Zero’ and ‘supporting growth in local businesses’.
Hundreds of jobs are at risk, many in the areas the levelling up agenda is supposed to be supporting most. Indeed, 240 highly skilled jobs in Swansea University alone are at risk in a matter of weeks.
Hundreds of jobs are at risk, many in the areas the levelling up agenda is supposed to be supporting most.
This ‘blind spot’ exists despite the fact that in 2019, Smith and Reid put forward a compelling case for transferring a small part of ESIF replacement funds to allow R&I projects to be supported through BEIS. This was not done and we are now seeing the consequences:
- UKSPF will award £2.6 billion of funding by 2025.
- The wider remit of the UKSPF means far less is available to support successful R&I projects, which will not match the £3.7 billion invested through ESIF on ERDF R&I projects since 2014. Locally focused mechanisms also make large-scale, cross-regional collaboration needed for effective R&I projects almost impossible.
- Wales will receive £772 million less under the UKSPF than it would have under continued EU structural funding. The 40 University-led ERDF R&I projects in Wales are now at risk.
Now is the opportunity for George Freeman MP, who continues to champion the UK as a science superpower, and Michael Gove MP, who has backed investment zones as knowledge-intensive growth clusters focused in part on universities, to come together and tackle the blind spot that exists.
Can the UK step back from the cliff edge?
Despite the scale of the problem and the number of jobs at risk, the cost of providing bridging funds to support these projects is relatively small.
As many as 166 ERDF R&I projects across the UK are rapidly reaching the cliff edge this year.
We estimate that ringfencing £170 million, or 6%, of the UK Shared prosperity fund would provide funding for the continuation of the 166 university-led ERDF R&I projects across the UK to 2024 –5 when the current UKSPF comes to an end.
This would provide the space for the university sector, BEIS and DLUHC to work together to develop a long-term, sustainable approach to funding this work.
Stepping back from the cliff edge would save hundreds of jobs, support a range of cutting-edge innovation projects that are driving economic growth, and provide direct investment in areas that the UK government has stated are at the heart of its own levelling up ambitions.
Take a look at Professor Paul Boyle's piece in Wonkhe: Levelling up or levelling down?
