Britain faces $7.8 billion EU funding gap for farms, colleges after Brexit

Britain will plug a funding gap of up to 4.5 billion pounds (S$7.8 billion) for European Union-financed projects in agriculture, universities and its regions.
Britain will plug a funding gap of up to 4.5 billion pounds (S$7.8 billion) for European Union-financed projects in agriculture, universities and its regions.PHOTO: AFP

LONDON (Reuters) - Britain will plug a funding gap of up to 4.5 billion pounds (S$7.8 billion) for European Union-financed projects in agriculture, universities and its regions once it leaves the bloc, Finance Minister Philip Hammond said.

Scientists, farmers and other recipients of EU funding had been facing uncertainty after Britain voted to leave the EU on June 23, before receiving reassurance on Saturday (Aug 13) that the UK government would pick up the tab.

The new guarantee over funding comes as Britain faces the looming prospect of a recession following the Brexit vote, with uncertainty over a new relationship with the EU expected to cause firms to defer investment and consumers to slow spending.

Hammond said projects signed before Britain's Autumn Statement financial update, will continue to be funded by Britain after it formally leaves the EU and the UK would match the current level of agricultural funding until 2020.

The country will not start the two-year leaving process this year Prime Minister Theresa May has said.

Hammond told British media that the funds needed to fill the gap left by the EU are around 4.5 billion pounds a year.

"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," Hammond said.

The funding guarantee covered structural and investment funds and Horizon research funding, the Treasury said.