UK Government Agrees to Protect EU Funded Broadband Projects

After a nail biting few weeks of uncertainty the UK Government’s Chancellor, Philip Hammond, has finally pledged to protect and in some cases underwrite broadband infrastructure projects that are in the process of receiving or bidding for additional state aid funding from the EU.

Concerns were raised last month (here) after it emerged that a number of projects and organisations in the United Kingdom were finding it hard to secure investment from the £3bn European Regional Development Fund (ERDF), partly because the Government appeared to have put a “pause” on payments. The same source has also been used by a large number of rural broadband schemes, particularly in Cornwall.

Admittedly the number and scale of active or planned ERDF supported broadband projects in the UK has diminished significantly over the past couple of years, although there are still a few seeking funding worth many millions of pounds from that pot and until recently it had been expected that these would not be affected until after the UK leaves (predicted for around 2019/20).

The good news is that the Government has today offered to “end uncertainty” and “guarantee” funding from the EU for all structural and investment fund projects (including agri-environment schemes) through a series of assurances, even when these projects continue a little beyond the UK’s departure from the EU.

Philip Hammond, Chancellor of the Exchequer, said:

“The UK will continue to have all of the rights, obligations and benefits that membership brings, including receiving European funding, up until the point we leave the EU.

We recognise that many organisations across the UK which are in receipt of EU funding, or expect to start receiving funding, want reassurance about the flow of funding they will receive.

That is why I am confirming that structural and investment funds projects signed before the Autumn Statement and Horizon research funding granted before we leave the EU will be guaranteed by the Treasury after we leave. The government will also match the current level of agricultural funding until 2020, providing certainty to our agricultural community, which play a vital role in our country.

We are determined to ensure that people have stability and certainty in the period leading up to our departure from the EU and that we use the opportunities that departure presents to determine our own priorities.”

However the big caveat is that related deals must be “signed before” the 2016 Autumn Statement (usually November or December), which doesn’t give schemes that are still bidding for investment from the EU much time to get their bids finalised. This is perhaps a way of controlling what the Government may be asked to underwrite via UK funding, so that it doesn’t continue too far beyond 2020 (the UK isn’t expected to formally leave the EU until around 2019/20).

The structural and investment subject to these assurances include:

* The European Agricultural Fund for Rural Development – CAP Pillar 2

* The European Social Fund

* The European Maritime and Fisheries Fund

* The European Regional Development Fund including European Territorial Cooperation

The Treasury also said it would 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; further details on that will surface over the next couple of months. Check out the Official Letter on this commitment.