With current events being set into motion, we can easily spot a big shift in the structure of the European Union and EU funding in general. We are, of course, talking about Brexit and the ‘’no-deal’’ that will severely shake the waters of uncertainty. After Brexit, European funding will no longer be available to all the UK partners. This will include projects that were meant to start as well as projects that are currently running.
Organizations all around Europe are struggling to find a way to best prepare for the mitigation of the impact.
What exactly does Brexit mean in terms of European funding?
The Multiannual Financial Framework (MFF) guaranteed that, in the case of No Brexit, the UK would remain an important stakeholder for the European funding programmes with full participation for the period between 2014 and 2020.
However, once Brexit enters into force, the UK will no longer be a part of the Multiannual Financial Framework. That could be a really big blow not just for the UK organizations but for the country’s finances in total. Through Horizon 2020 alone, the UK has received over 5 billion EUROS in funding, it has supported a number of close to 11.000 participating entities and it has implemented over 6.000 projects in total.
The UK itself is a major contributor as it is responsible for 11% of the EU’s total budget. The fact that it receives approximately 16% of EU science funding constitutes the country as a ‘’net beneficiary’’. Thinking about the future after Brexit we see that organizations, although they will be able to take part in EU programmes, will no longer be eligible for any EU grants. That means that any participation they want to have, they are going to have to fund it by themselves or from other types of sources!
Consequences for UK organizations
Exactly what is going to happen to the UK organizations that are participating in funded programmes or that are currently applying for funding, once Brexit hit in? Here are two possible scenarios that might follow Brexit:
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The Withdrawal Agreement: This was the original deal that was agreed in November 2018 by the then UK minister, Theresa May. The notion was later rejected by the House of Commons on March 12th, 2019 for the second time.
If the Withdrawal Agreement is set into motion that will mean that the UK will continue participating in EU funding programmes, since that was one of the terms of the agreement.
- The No-Deal Brexit or Hard Brexit: After March 29th or any alternative date at which Brexit will occur and assuming that this is the final ‘’ deal ’’ between the UK and Europe, all UK partners will be deemed as ineligible for funding. No current contract will be able to protect the partners.
Preparing for the No-Deal Brexit Scenario for EU funding
The chaos that will follow the No-Deal Brexit will be rather hard to control but not impossible, in terms of EU funding. There will be massive impact and the organizations will need to figure out the right way to mitigate that impact in the best way possible. Here are a few steps that organizations will need to take to prepare for Brexit.
New Projects
As it is with many other countries that are not part of the EU cluster, there are some projects that require participants from non-EU member States. These participants, of course, are only eligible under very specific circumstances such as requirements of the call itself or a participant of a non-Member State has agreed to be necessary for project execution.
Unfortunately, none of the circumstances will be available for the currently running EU projects which will mean that the UK participant will no longer be eligible for their own projects. They will be allowed to continue their activities as parts of the project but they will not be entitled to any funding budget provided by the EU.
The two following pieces of advice are given to participants and consortiums that are either running or about to submit a proposal involving UK partners:
- If a party is currently in the process of drafting a project proposal within a European Commission framework (including Horizon 2020), and one or more of its partners is/are located in the UK, it is highly advisable for this party and its consortium partners to discuss the different possible scenarios and how to specifically cope with a ‘no-deal Brexit’ outcome;
- Specific attention should be given to how the UK parties’ project costs will be covered for the period after Brexit, in order to maintain their involvement in the consortium and not deter them from participating. This funding gap can perhaps be covered by the UK parties’ own available funds or through co-funding by the EU-based consortium partners.
Projects with completed negotiations
For a project where negotiations have already been completed, these are the two steps that will need to be taken:
- All consortium agreements now already include a clause in the Evaluation Letter, stating that ‘a project with UK partners will only be entitled to EU funding until the end of the project life cycle if a withdrawal agreement is established’.
- The consortium of partners should start discussing the potential consequences of including UK partners as soon as possible. If the consortium believes that it is essential or valuable to maintain the participation of the UK partners, then they will need to make clear agreements to ensure that all costs will be covered in any way possible.
Currently Running Projects
All UK partners will automatically lose their eligibility criteria for EU funding. According to EU statements, UK organizations will be given the opportunity to step down from ongoing projects after the no-deal Brexit. However, even this action will not come without consequences.
- The consortium will need to find another partner that will be able to cover the technical capacities and the role of the UK partner.
- In general, a partner withdrawal may render the project ineligible for funding as a whole. That will most likely be due to the fact that the rest of the partners will not be able to fulfill all the necessary requirements. As a result the project will collapse which will mean that the partners will be receiving compensation but only for the activities that took part until the final date of the Brexit.
On July 24th 2018 and in an effort to calculate and attempt to manage this dreadful situation, the UK Finance Ministry announced an ‘’Underwrite Guarantee’’. According to this document, the British government has commited to take on all of the EU’s financial obligations towards UK partners, for current ongoing projects.
This will apply for projects under the Horizon 2020 Financial Framework as well as the Euratom Research and Training project and any ongoing project under the Framework Programme 7.
It is advised for all UK partners to register through the portal managed by UK Research and Innovation, aiming at applying for UK Funding and manage to receive additional and relevant Brexit Information.
The ‘’threat’’ of the No-Deal Brexit remains still a real possibility. All partners UK and not are advised to immediately prepare for this possible scenario.
