Hundreds of local jobs, skills and growth on a cliff edge across the UK as funding stalls

The government is being warned that jobs and talent are at risk, and over 100 local innovation, skills and business support projects teetering on the brink, because of delays and complications as European Union funding for local skills and training partnerships ends.

University-led projects currently supported by the European Structural and Investment Funds (ESIF) scheme were set up to deliver growth in areas of the UK that most needed this support. They provide high quality skills training, and support local pay, employment, and productivity growth, with half working with small and medium size businesses. UK projects are now not eligible for this fund.

Projects can apply to the UK Shared Prosperity Fund (UKSPF) which will award £2.6 billion of local investment by March 2025 – but there has been no guarantee that existing ESIF projects will be supported to continue. The initial process for applying to the UKSPF proved fraught, with complexity and short timelines making it difficult for projects to submit bids.

Confusion over the process, combined with the lower levels of investment available compared to the ESIF, has left many projects stepping over a cliff edge, uncertain whether they can continue their work once existing European Union funding runs out. Some are being forced to pause activity and other projects may soon need to cease altogether; undermining universities’ ability to support local skills, innovation and business.

Universities UK (UUK) called for urgent action on this earlier this year, and now says the situation is critical. UUK, in partnership with GuildHE, has written to the Secretary of State for Levelling Up, Housing and Communities Simon Clarke MP, to warn that talent is 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 action from government.

In the letter, the organisations call for short term bridging funding to allow these projects to continue, while offering to work with government to develop a clearer system of local funding for the long term.

Professor Stephen Marston, Treasurer of Universities UK and Vice Chancellor of the University of Gloucestershire, said:

“Universities 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.

“Our ability to do so this however is being seriously undermined. We need help and support to keep our business engagement services running, but it is becoming increasingly apparent that instead many of these valuable projects up and down the country will be forced to cease, at a cost of lost jobs, lost talent, and lost partnerships.”

Professor Paul Boyle, Vice Chancellor of Swansea University, said:

“At a time when investment and growth is top of the economic agenda, we are seeing projects which make such a valuable economic contribution in local areas across the UK facing closure.

“At Swansea University alone, we could see over 50 EU funded projects close, with the loss of 270 high skilled roles.  These lost roles, lost talent and lost business support will hit the local economy hard.”

Helen Turner, Director of Midlands Innovation, a partnership representing eight universities across the Midlands, said:

“Our partners have used ESIF funding to support well over 1000 Midlands businesses, leading to new products and services and to millions of pounds worth of increased turnover that businesses have reported as a result, as well as the hundreds of jobs that have been protected or created, and the gross value added. 

“At a time when the country has ambitious plans to drive growth and productivity, tried and tested university-led business support programmes are in very real danger of ceasing.

“We are keen to urgently work with Government, UUK and others to make sure businesses remain supported at what is already a significantly challenging time for them, and to help the UK be able to realise its potential in driving further growth and productivity.”

The issue was raised at the House of Commons Science and Technology Committee by the Chief Executive of Universities UK, Vivienne Stern, MBE.

She said “[University] facilities are designed for companies to access research expertise.”

“There is no funding available through UKSPF to keep this going, we need the Department for Levelling Up to understand that it now has a real stake in the research infrastructure system”.

Projects that were supported by the ESIF include 192 university-led projects in England, funded to the tune of £412 million and providing high quality skills training, supporting local employment and productivity growth. There are a further 53 in Wales, with £300 million investment from ESIF.

The majority of these will see their funding disappear within the year, and face no immediate solution with the government’s full replacement funding not in place until 2024/25.

Projects under threat include:

• The Materials and Manufacturing Academy (M2A) delivered by Swansea University 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 & manufacturing.  M2A is a £25.5m project part funded by the European Social Fund, with funding 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. 

• The University of Newcastle’s Arrow initiative is designed to de-risk, speed-up and strengthen innovation activity in regional SMEs, by linking up businesses with the University’s expertise and resources. Arrow has supported over 120 businesses to develop new products and services, with 95% of businesses surveyed reporting greater impacts as a direct result. Current projections, based on an interim independent evaluation, is that over the next three years, it will lead to the creation of 143 new jobs, 53 new products or services developed for the market, £2.6m private investment raised and £16.9m growth in turnover for those SMEs involved. Funding of £1m per annum from EU funds is due to expire in March 2023.
• The FLEXISApp project, led by Cardiff University, is generating green and economic growth across Wales through industrial partnerships collaborating on the commercialisation of research to decarbonise future energy supply. The project has received most of its funding, almost £3 million from the ESIF programme, which runs out in November 2022.    
• The Gloucestershire Growth Hub is a business support service delivered through a partnership between the University of Gloucestershire, the GFirst Local Enterprise Partnership (LEP), and other partners. Since 2017, half of its funding has come from the ESIF, around £3.4 million, which runs until March 2023, and it has received matched funding from the University of Gloucestershire in partnership with GFirst LEP. It is estimated that the Growth Hub, located in the university’s business school, has supported Gloucestershire businesses to create 1,100 jobs, £155 million Gross Value Added (GVA) and boosted turnover by £400m since 2014.

• The University of Manchester’s Bridging The Gap programme, delivered by the Graphene Engineering Innovation Centre (GEIC), accelerates the adoption and commercialisation of graphene and 2D materials. The programme has engaged with more than 200 SMEs, generating new products and jobs, and has enabled a thriving start-up community. The project is receiving £1.9m from ESIF, which will end in December 2022.

• The Sheffield Innovation Programme (SIP) is a regional initiative – led by Sheffield Hallam University, the University of Sheffield and Sheffield City Region Growth Hub – which aims to stimulate business growth and promote the development of long-term relationships with SMEs, providing access to a broad range of academic expertise and university facilities. Support is all at no cost to the business. Since 2016 the programme has provided innovation support, in the form of bespoke research and innovation-based consultancy, workshops and other events, at zero cost to more than 350 SMEs. SIP is part-financed by the European Regional Development Fund, which is due to end in June 2023.