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EU funding
in a no-deal Brexit

EU funding in a no-deal Brexit

Published: 1st September 2018
Area: Corporate & Commercial
Author: Uddalak Datta

The UK government has published details of its preparation plans if it fails to agree an agreement for the UK’s future relationship with the EU-27 following its departure from the EU.

This outcome, described as a “no-deal” Brexit, would occur where the UK leaves the EU without a Withdrawal Agreement and framework for a future relationship between the UK and the EU. In a “no deal” scenario, the European Commission has indicated that it would intend to treat the UK as a third country for all purposes. This, at least, is an entirely clear position which institutions can understand and plan around.

The UK commentary is much more difficult to plan around and does not add to existing UK government statements. The Treasury has already helpfully provided a guarantee that UK organisations can continue to receive EU funding in respect of EU projects agreed before the UK leaves the EU. The guarantee covers:

  • 2014-20 structural and investment funds;
  • the payment of awards where UK organisations successfully bid directly to the European Commission on a competitive basis while the UK remained in the EU;
  • the payment of awards under successful bids where UK organisations are able to participate as a third country in competitive grant programmes from exit day until the end of 2020.

The second item on this list, of course, requires that the UK is eligible to participate as a third country. This is relevant for current research project grant applications. Some Horizon 2020 calls do not permit third country participants at all: these include the prestigious European Research Council (ERC) grants, some Marie Sklodowska-Curie Actions (MSCA); and the SME instrument for small businesses.

Many projects require at least three independent partners, each based in an EU member state. An existing project proposal with three EU participants, including a UK institution, might need to revisit the membership of that party. The UK Treasury statement explicitly will not cover funding for organisations from other countries who are in a consortium with a UK participant, which creates a problem for those UK organisations leading and project-managing research projects.

A separate notice for UK applicants for Erasmus+ projects indicates that they will also receive funding from successful bids in a ‘no deal’ scenario. But of course, that guarantee is similarly dependent on the institution still being eligible to continue to participate in Erasmus+ projects. In an instructive example of non-comprehension of the structure and dynamic of EU projects, the government indicates that if discussions with the Commission to secure UK organisations’ continued ability to participate in the programme are unsuccessful, the government will engage with member states and key institutions (i.e. the European Commission) to seek to ensure UK participants can continue to participate.

The notice does not assist in making the decision whether to sink further costs in a project which might ultimately no longer meet the minimum funding conditions. The notice recommends that institutions consider whether they need separate professional advice before making specific preparations – such as making a go/no-go decision. It is hard to see how any professional could help.

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