Over the next twelve months, the UK’s access to many large-scale European Union funding programmes, under the auspices of European Structure and Investment Funds (ESIF), is due to come to an end. The UK Government made a commitment to replacing this lost EU funding, and this year confirmed the scale and delivery mechanism for these replacement funds in the form of the UK Shared Prosperity Scheme (UKSPF).
The recently launched UKSPF will award £2.6 billion of local investment across the UK by March 2025, when the scheme will be in place fully. Wales, which has been a significant beneficiary of EU funding, can expect to receive just £585m through UKSPF by 2025. Had the UK remained a member of the EU, Wales could have expected to receive around £1.4 billion in Structural Funding within the same period. Using the previous EU funding period (2014-2020) as a basis, we could also have expected that approximately 20% of that funding would have been allocated to research and innovation in Wales, which is primarily led by Welsh universities.
The lower levels of investment available, combined with UK Government’s decision to distribute UKSPF funds via Local Authorities, have rendered it unlikely that the ambitious large-scale research projects previously supported by ESIF will continue to be funded via UKSPF. This funding gap represents a genuine threat to jobs and talent across the UK and has left many projects stepping over a cliff edge, uncertain whether they can continue their work once existing European Union funding runs out.
University-led projects currently supported by the ESIF scheme were established to deliver growth in areas of the UK that most needed this support. They provide high quality skills training, and encourage growth in local pay, employment, and productivity, with half of these projects working with small and medium size businesses.
At a time when investment and growth is top of the economic agenda, these projects – all of which make a significant economic contribution to regions across the UK – are facing closure. Projects that were supported by the ESIF include 192 university-led projects in England, funded to the tune of £412 million to provide high quality skills training, supporting local employment and productivity growth. There are a further 53 projects at risk in Wales, with a total ESIF investment of £300 million. The majority of these will see their funding disappear within the year, with no immediate solution in place.
At Swansea University alone, we could see over 50 EU funded projects close, with the loss of 270 highly skilled roles. One such project at risk is our Materials and Manufacturing Academy (M2A) which aims to create the future leaders of Welsh industry through industry-sponsored postgraduate research. The M2A focuses on industrial research projects in computational modelling, functional coatings, materials and manufacturing.
This £25.5m project is part funded by the European Social Fund, but its funding is due to end in December 2023. With the loss of European funding, knowledge exchange between industry and academia within materials and manufacturing will be dramatically reduced. There will be fewer opportunities for Swansea University students to work alongside industry, secure jobs as a result and remain in Wales, leading to a loss of skills and talent. If projects like this are forced to terminate through lack of funding, these lost roles, lost talent and lost business support will have a significantly detrimental effect on our local economy.
This project is just one local example of many across Wales, but the cumulative impact of this loss of funding will be considerable to the UK as a whole. Indeed, recently, Vivienne Stern MBE of Universities UK (UUK) and Gordon McKenzie of GuildHE who together represent 196 universities and higher education providers across the UK, wrote to the Secretary of State for Levelling Up, Housing and Communities, Simon Clarke MP, to warn that jobs, talent and knowledge are being lost across all regions and nations of the UK, and that hundreds of jobs will need to be cut if there is not urgent funding action from the UK Government.
Some existing projects have already been forced to pause activity and other projects may soon need to cease altogether, which undermines universities’ ability to support local skills, innovation and business. UUK have therefore now called on the Department for Levelling Up to provide short term bridging funding to enable these projects to continue, with an offer to work with UK Government to develop a clearer system of local funding for the long term.
At Swansea University, as with higher education institutions across Wales and the UK, we want to play our full part in the national growth strategy and are ideally placed to do so through high quality skills training, research, innovation and enterprise, apprenticeships and more. As we collectively approach the cliff edge, now is the time for UK Government to step in and give us the short-term support that is required to protect these valuable projects that will otherwise be forced to cease, at an avoidable cost of lost jobs, lost talent, and lost partnerships.