HMG advice on UK State Funding schemes post-Brexit

HMG’s second batch of technical notices on the implications of a no-deal outcome include advice on:

  • European Regional Development Funding
  • European Social Fund (ESF) grants
  • Funding for UK LIFE projects

Latest versions of the Notices can be found here.

 

EUROPEAN REGIONAL DEVELOPMENT FUNDING

The current European Regional Development Fund Programme provides funding to support regional growth and reduce differences in economic performance between regions.

The programmes are managed by the Ministry of Housing, Communities and Local Government in England, and by Devolved Administrations in Scotland, Wales and Northern Ireland, as well as HM Government of Gibraltar.

The draft Withdrawal Agreement between the UK and the EU published in March 2018 would mean that the UK would continue to participate in the European Regional Development programmes until programmes end in 2023, subject to a final negotiated agreement.

This provides certainty to regions and communities, who will continue to receive the same level of funding as they would have if the UK was a member of the EU until the end of the 2014-2020 programme period.

Funding is currently administered through organisations who are awarded grants and contracts on a competitive basis and a range of business finance models that provide venture capital and loan finance.

After March 2019, if there’s no deal, the UK government has guaranteed certain EU projects agreed before we leave the EU in order to provide more certainty for UK organisations over the course of EU exit. This guarantee included European Regional Development Fund projects.

In July 2018 the government extended the guarantee so that it would cover all projects, including European Regional Development Fund projects, that would have been funded by the EU under the 2014-2020 programme period. The extension means that the Ministry of Housing, Communities and Local Government, the Devolved Administrations, and HM Government of Gibraltar, will continue to sign new projects after EU exit until programme closure.

UK Managing Authorities would administer the guarantee through existing national and local arrangements, modified and simplified as appropriate in line with wider rules on public spending.

Projects will be managed to ensure appropriate audit, monitoring and evaluation arrangements are in place and that spending delivers good value for money and fits domestic strategic priorities.

Organisations should continue applying for and delivering funding under current arrangements.

HMG’s paper can be found here:

 

EUROPEAN SOCIAL FUND GRANTS (ESF)

The current European Social Fund in the UK provides funding for employment schemes, education and training, to support disadvantaged people and help them acquire relevant skills to support entry into employment and progression in work.

Individual ESF programmes are managed by the Department for Work and Pensions in England, and by Devolved Administrations in Scotland, Wales and Northern Ireland, as well as HM Government of Gibraltar.

The draft Withdrawal Agreement between the UK and the EU published in March 2018 would mean that the UK would continue to participate in the European Social Fund programme until programmes end in 2023, subject to a final negotiated agreement.

Potential grant recipients currently make applications to Managing Authorities (Department for Work and Pensions in England, the Devolved Administrations, and HM Government of Gibraltar), in accordance with the project and appraisal processes in place for the relevant administration or Managing Authority.

After March 2019, if there’s no deal, UK organisations would be unable to access EU funding for European Social Fund projects after exit day.

HMG announced in August and October 2016 that it would guarantee certain EU projects agreed before we leave the EU in order to provide more certainty for UK organisations over the course of EU Exit. This guarantee included European Social Fund projects.

In July 2018 the Government extended the guarantee so that it would cover all projects, including European Social Fund Projects, that would have been funded by the EU under the 2014-2020 programme period. The extension means that the Department for Work and Pensions, the Devolved Administrations, and HM Government of Gibraltar, will continue to sign new projects after EU Exit until programme closure.

Managing Authorities will administer the guarantee through existing national and local arrangements, modified and simplified as appropriate in line with wider rules on public spending.

Organisations should continue applying for and delivering funding under current arrangements.

HMG’s paper can be found here:

 

UK LIFE PROJECTS FUNDING

The LIFE programme is an EU fund supporting environmental, nature conservation and climate action projects throughout the EU. It is funded and administered by the European Commission. The UK is currently a net contributor to the EU budget, and all EU funding is derived from funding by UK taxpayers.

Currently, UK organisations submit bids directly to the LIFE fund on a competitive basis for a variety of projects focused on environmental and climate action. Projects usually last between three and five years, with funding paid by the European Commission in stages throughout the project. Project payments are currently made directly from the Commission to the organisation leading the project, with no involvement by the UK government. On average, five UK-led projects are awarded LIFE funding each year.

After March 2019 if there’s no deal, the UK government has guaranteed to fund the following:

  • LIFE project bids submitted by UK organisations and approved by the European Commission while we are still a member of the EU; and
  • LIFE funding due to UK organisations acting as partners in projects led by other Member States. This covers ongoing projects, and those awarded funding before the end of 2020.

This means that, if required, the UK government would take over any remaining payments due to UK organisations involved in LIFE projects after March 2019, ensuring an uninterrupted flow of funding to these projects until they finish.

Payments due to be made to project leads after 29 March 2019 may no longer come from the European Commission, and so would need to be made by the UK government via Defra and the relevant devolved administrations.

Defra has contacted the small number of organisations in England leading LIFE projects due to be running after 29 March 2019 to request copies of project grant agreements, to inform contingency planning. Projects do not need to take any further action at present. The devolved administrations are making similar arrangements for projects where the lead partner is legally based within their countries. We are considering how environmental projects can be best supported in future when the UK is no longer part of the European Union.

The guarantee does not cover funding for organisations from countries in consortia with UK participants – only the funding for UK participants is in scope. We are aware of some cases where UK participants lead a consortium and are responsible for distributing funding to the other participants; the UK government is seeking to discuss how this could best be addressed in a ‘no deal’ scenario with the European Commission.

Further information can be found on the Joint Nature Conservation Committee website:

JNCC provides the National Contact Point service for LIFE in the UK.

Organisations can contact JNCC UKLIFE@jncc.gov.uk  if they have further questions, or look on the JNCC website for more information about the fund.

If you are a UK partner in a LIFE project led by another Member State and have concerns, please contact Defra at DefraLIFE@defra.gsi.gov.uk .

HMG’s paper can be found here:

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