Britain to Address £4.5 Billion EU Funding Shortfall for Farms and Colleges, Reports Reuters

LONDON (Reuters) – The British government is set to provide up to £4.5 billion in funding to support agriculture, universities, and regional initiatives, a gap that will emerge when the UK exits the European Union, as announced by Finance Minister Philip Hammond.

Following the June 23 decision to leave the EU, there has been considerable uncertainty among scientists, farmers, and various organizations that previously relied on EU funding. Hammond’s statement on Saturday offered reassurance that the government would ensure financial support in the wake of Brexit.

This commitment to funding comes in light of concerns over a potential recession following the Brexit vote, with expectations that companies may delay investments and consumers may reduce spending while the UK and EU negotiate their future relationship.

Hammond indicated that approximately £4.5 billion is needed annually to replace the funding previously provided by the EU, though the actual exit date for the UK remains uncertain, with Prime Minister Theresa May stating that the formal process of leaving would not begin this year.

"We recognize that many organizations across the UK that are currently receiving or expect to receive EU funding want assurances about future financial support," Hammond stated.

A fact-checking agency noted that last year, the British government contributed around £13 billion to the EU, receiving £4.5 billion in return. Hammond suggested that halting contributions to the EU would free up funds for investment in the UK economy.

The opposition Labour Party welcomed Hammond’s funding guarantees but emphasized the importance of maintaining membership in the European Investment Bank (EIB), which finances growth-supportive projects. In 2015, the EIB invested €7.8 billion in various UK projects.

Hammond’s guarantee, which covers structural and investment funds along with Horizon research funding, received positive feedback from organizations representing beneficiaries of EU funds and from the British Chambers of Commerce.

Meurig Raymond, president of the National Farmers’ Union, expressed hope that this short-term assurance would foster long-term confidence needed by farming businesses.

The Royal Society, a prominent scientific organization, indicated that reassurance regarding EU grants will help retain top talent in British research. “This announcement sends a strong message that Britain remains open and collaborative,” stated Venki Ramakrishnan, president of the Royal Society.

Hammond confirmed that projects agreed upon before the Autumn Statement would continue to receive funding even after the UK formally exits the EU, pledging to match the current level of agricultural funding until 2020.