The government’s guarantee for EU-funded programmes
Purpose
The purpose of this notice is to provide an overview of the scope of the government’s guarantee for EU-funded programmes and to link external stakeholders to the parts of government responsible for overseeing the application of the guarantee for specific programmes.
Before 29 March 2019 (may also apply to new exit date on 31 December 2020)
Until our departure from the EU, we remain a Member State, with all the rights and obligations that entails. This means that the UK will continue to participate in all EU programmes while we remain a member of the EU.
As agreed as part of the Financial Settlement, the UK will continue to take part in all EU programmes post 29 March 2019 (may also apply to new exit date on 31 December 2020) for the rest of the 2014-2020 Multiannual Financial Framework. This Financial Settlement has been signed off by both UK and Commission negotiators in a draft Withdrawal Agreement and welcomed by the other 27 EU countries at March European Council.
After 29 March 2019 (may also apply to new exit date on 31 December 2020) if there’s ‘no deal’
In the unlikely event of a ‘no deal’, the UK will leave the EU Budget in March 2019 meaning UK organisations would no longer receive future funding for projects under EU programmes, such as the European Regional Development Fund and Horizon 2020, without further action. However, the Chancellor announced in August and October 2016 that the government will guarantee EU projects agreed before we leave the EU, to provide more certainty for UK organisations over the course of EU Exit.
In July 2018, the Chief Secretary laid a Written Ministerial Statement (HCWS926) extending this guarantee to provide further stability for UK organisations in a ‘no-deal’ scenario. The guarantee now covers the following:
- the full 2014-20 Multiannual Financial Framework allocation for structural and investment funds
- the payment of awards where UK organisations successfully bid directly to the European Commission on a competitive basis while we remain in the EU
- the payment of awards under successful bids where UK organisations are able to participate as a third country in competitive grant programmes from Exit day until the end of 2020
- the current level of agricultural funding under CAP Pillar 1 until 2020.
For awards where UK organisations successfully bid directly to the European Commission on a competitive basis, we will work with the Commission to ensure that UK organisations will be able to continue to participate.
Implications
This guarantee ensures that UK organisations, such as charities, businesses and universities, will continue to receive funding over a project’s lifetime if they successfully bid into EU-funded programmes before the end of 2020.
Horizon 2020
Purpose
This notice provides information on the Horizon 2020 underwrite guarantee, the extension to the guarantee and how our plans to support UK research and innovation will work in practice. It is aimed at UK organisations, such as universities and businesses, who are in receipt of Horizon 2020 funding or who are bidding for such funding. It will also be of interest to EU organisations who work with UK participants on Horizon 2020 projects.
Before 29 March 2019 (may also apply to new exit date on 31 December 2020)
Horizon 2020 is an EU Research and Innovation programme which provides about €80 billion of funding available over 7 years (2014 to 2020); the UK has secured €4.6 billion of funding to date (14.3% of the total). The UK is currently a net contributor to the EU budget.
Horizon 2020 couples research and innovation, focusing on excellent science, industrial leadership and tackling societal challenges. The UK and EU’s intention is that the eligibility of UK researchers and businesses to participate in Horizon 2020 will remain unchanged for the remaining duration of the programme. This has been agreed as part of the Financial Settlement which was signed-off by both UK and European Commission negotiators in a draft Withdrawal Agreement and welcomed by the other 27 EU countries at March European Council.
After 29 March 2019 (may also apply to new exit date on 31 December 2020) if there’s ‘no deal’
In the unlikely event of a ‘no deal’ scenario, the UK’s departure from the EU would mean UK organisations may be unable to access funding for Horizon 2020 projects after exit day. However, the Chancellor announced in August and October 2016 that the government will guarantee funding for competitively bid for EU projects submitted before we leave the EU, including Horizon 2020 projects. This guarantee will cover all successful bids submitted by UK participants before the UK exits the EU, for the full duration of the projects.
The guarantee does not cover funding for organisations from other countries who are in consortia with UK participants – only the funding for UK participants is in scope. We are aware of some cases where UK participants lead a consortium and are responsible for distributing funding to the other participants; the UK government is seeking to discuss how this could best be addressed in a ‘no deal’ scenario with the European Commission. These discussions would also need to include consideration of projects where the UK’s change in status from member state to third country could lead to concerns about ongoing compliance with Horizon 2020 rules (for example, where a consortium no longer meets the threshold for member state and/or associated country participants).
In July 2018, the Chief Secretary laid a written ministerial statement (HCWS926) extending this guarantee to provide further stability for UK organisations in a ‘no deal’ scenario. The guarantee now additionally covers funding for successful bids where UK organisations are able to participate as a third country in competitive EU grant programmes. This extension runs from exit day until the end of 2020.
In the unlikely event of a ‘no deal’ scenario, we therefore intend that UK researchers and businesses would be able to apply to and participate in all those Horizon 2020 calls open to third country participants from the date of exit, with funding provided via the extended guarantee. Third country participation is a well-established part of Horizon 2020 – entities from third countries currently participate in and lead consortia in a wide range of collaborative programmes. The government is seeking discussions with the European Commission to agree the details of our continued participation as a third country.
Third country participation does not extend to some Horizon 2020 calls; these include European Research Council (ERC) grants, some Marie Sklodowska-Curie Actions (MSCA) and the SME instrument. The government is considering what other measures may be necessary to support UK research and innovation in the event that the guarantee and the extension are required.
Looking beyond 2020, the UK remains committed to ongoing collaboration in research and innovation and wants to work with the EU on a mutually beneficial outcome. The government set out its plan for the future relationship between the UK and the EU in its White Paper, which includes the proposal to form a cooperative accord with the EU on science and innovation.
At the same time, the government is signalling our commitment to the future of our country and the world through our goal to increase UK research and development spending to 2.4% of GDP by 2027.
The government is also working in partnership with UK Research and Innovation to develop a new International Research and Innovation Strategy. The Strategy will further set out our desire to build on the UK’s long tradition of international collaborations in research and innovation across all fields and our openness to international talent.
Implications
The UK is providing funding through the underwrite guarantee and extension to support UK participants to continue to take part in Horizon 2020 projects, subject to eligibility for participation in the project. The government is seeking discussions with the European Commission to agree the precise details of eligibility. The government is also considering what other measures may be necessary to support UK research and innovation in a ‘no deal’ scenario.
Actions for businesses and other stakeholders
For all UK recipients
UK Research & Innovation (UKRI) will be developing systems to ensure payments to beneficiaries of Horizon 2020 funding can continue. Current UK recipients of Horizon 2020 funding will soon be invited to provide initial data about project(s) on a portal hosted on GOV.UK. The portal is designed to ensure that UKRI has information about projects and participants in order to deliver the underwrite guarantee if required. UKRI will use the contact details provided by current recipients to inform them of the next steps in the process.
The portal will remain open after the UK leaves the EU so that UK applicants can continue to register as and when they are informed that their bid has been successful. More information on the portal is available on the UKRI webpage.
For EU Citizens and Organisations
Organisations in member states who are part of a consortium with UK participants do not need to register on the portal. The government will ensure that details of UK systems and processes are shared before you need to take action. These measures are intended to deliver continuity for both UK participants, and their research partners in the EU.
Delivering humanitarian aid programmes
Purpose
This notice is to set out our offer to UK humanitarian aid organisations, which will allow them to continue bidding for funding from the core budget of the European Civil Protection and Humanitarian Aid Operations (ECHO) without undertaking unmanageable financial and programmatic risk.
Before 29 March 2019 (may also apply to new exit date on 31 December 2020)
Article 7 (1)(b) of the Humanitarian Aid Regulation (Council Regulation (EC) No 1257/96) sets out that eligible non-governmental organisations (NGOs) must:
- be non-profit-making autonomous organisations in a member state under the laws in force in that member state
- have their main headquarters in a member state or in the recipient third country. This headquarters must be the effective decision-making centre for all operations financed under the regulation. Exceptionally, the headquarters may be in a third donor country
This should not exclude UK organisations prior to the UK’s withdrawal, given that we remain an EU country until 29 March 2019 (may also apply to new exit date on 31 December 2020). In addition, the Joint Report, published last December, recognises the eligibility of UK entities to participate in current EU programmes will be unaffected by the UK’s withdrawal from the EU until programme closure.
UK-based organisations and individuals should be able to:
- bid for funding
- participate in and lead consortia
until programme closure, and otherwise implement as normal all EU development programmes which are approved before December 2020.
Despite this, European Commission contingency planning has had the effect of discouraging UK organisations from bidding for ECHO funding. ECHO appears to require UK organisations bidding for funds to undertake, in a ‘no deal’ scenario, the delivery of all programme outputs beyond March 2019 without ECHO funding, should they not decide or not be required to leave the programme. In addition, ECHO has inserted the below clause in their grant agreements with UK organisations:
“For British applicants (non-governmental organisations): Please be aware that you must comply with the requirement of establishment in an EU member state for the entire duration of the grants awarded under this Humanitarian Implementation Plan (HIP). If the United Kingdom withdraws from the EU during the grant period without concluding an agreement with the EU ensuring in particular that British applicants continue to be eligible, you will cease to receive EU funding or be required to leave the project on the basis of Article 15 of the grant agreement.”
This is discouraging UK organisations from bidding and in some cases EU delegations are encouraging them to step down. We are keen to resolve this issue as soon as possible, given that it sets an unwelcome precedent for the UK to make future contributions through ECHO.
After 29 March 2019 (may also apply to new exit date on 31 December 2020) if there’s no deal
If the UK leaves the EU in March 2019 with no agreement in place, ECHO could therefore either require UK organisations to leave their projects or even terminate funding to UK organisations but nevertheless expect them to implement the ECHO project in full. Neither of these outcomes would be acceptable to the UK government.
Implications
The termination of funding by ECHO would leave organisations with existing grants with no other option but to either terminate projects early and abruptly, with high extraction costs and negative programmatic consequences, or to finance the remainder of the programme themselves.
This risk is discouraging organisations from bidding entirely, and has had a significant impact on UK organisations’ access to ECHO funding for several months. They are losing access both to new grants, and grants which they have been successfully implementing for years.
UK government offer
To facilitate continued applications by UK organisations to ECHO, and to avoid early termination of programmes, the government commits to funding the post-March 2019 outputs of any programme funded from ECHO’s core budget, where a UK organisation is the lead consortium partner or sole implementer. This will apply only in a no deal scenario when ECHO terminates funding based on the clause quoted above at the time of the UK’s exit from the European Union.
This commitment is subject to the following principles:
Applicable funding:
- this commitment only applies to new applications for ECHO funding between the date of this notice and 29 March 2019 (may also apply to new exit date on 31 December 2020)
- the UK government will not reimburse any programme activity that was undertaken prior to 30 March 2019
- this commitment is only applicable to programmes financed by core ECHO funding
- this commitment applies only to programme outputs delivered by UK-based NGOs
Requirements for receiving funding assurance:
- organisations must provide evidence for their status as a UK-based entity by submitting their registration number and address
- organisations must notify DFID on the date on which it applies for the ECHO grant in question and again on the date on which ECHO awards the grant
- at that time the organisation must provide a breakdown of expected amount, profile and timeline of spend agreed with ECHO, clearly indicating all chargeable work up to 29 March 2019 (may also apply to new exit date on 31 December 2020)
- organisations must give DFID sight of draft grant agreements prior to signing
DFID will reimburse only UK-based organisations that are either:
- consortium lead for the programme in question
- the sole implementer
- sub-contractors forming part of UK-led consortia
Any project components sub-contracted to non UK-based sub-contractors forming part of UK-led consortia are ineligible for reimbursement under this commitment
Requirements for receiving funding:
- organisations must have successfully undergone DFID due diligence and must comply with all standard DFID Accountable Grant clauses
- organisations must provide evidence for the funding disbursements already received from ECHO prior to 30 March 2019 and confirmation that all chargeable work under the grant to this date has been paid for by ECHO
- the government reserves the right to apply the same delivery, safeguarding and fiduciary requirements and expectations as set out by ECHO, and to terminate or withhold funding if these are not met
This Article draws on information published by the UK Department for Exiting the EU “UK Government’s Preparations for a no deal scenario” August 2018. UK public sector information is reproduced pursuant to the Open Government Licence The Legal Materials contain UK public sector information licensed under the Open Government Licence v3.0. The Licence is available at http://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/ (the UK Licence).
