A letter signed by over 300 SMEs and 16 universities has been sent to the Chancellor of the Exchequer Jeremy Hunt this week. The signatories call on the Chancellor to provide bridge funding for university-led research & innovation projects funded through the European Regional Development Fund (ERDF), which is used by universities to support local businesses. The UK will lose access to the funding at the end of March 2023.
Ahead of the Spring budget, the letter proposes that the Chancellor ringfences 6% (£170m) of the UK Shared Prosperity Fund to continue these projects until 2024-25.
The letter was coordinated by University Alliance, which represents the UK’s leading professional and technical universities. Professional and technical universities have particularly strong relationships with local businesses, and their ERDF-funded programmes provide vital innovation support for SMEs to help them flourish in the very beginnings of their development. Support includes advice services, office space and facilities, access to important business networks, access to the expertise of researchers and research-backed courses on business growth and management.
Many signatories of the letter stated their businesses would not have survived the pandemic, or indeed exist at all, without the support of such vital funding programmes.
Without a clear replacement or alternative funding route these programmes face a funding ‘cliff-edge’. Funding from the ERDF only covers part of these projects and has acted as a springboard for significant co-investment from universities and the private sector. This could result in a loss of assets, expertise, infrastructure or complete closure for said programmes, which will disadvantage regional economies and innovation ecosystems throughout the UK. It will also directly hinder the levelling up agenda.
University Alliance CEO Vanessa Wilson said:
“This is a funding cliff-edge that – if not addressed now – could turn into a valley of death for local innovation in the coming years. In just over a week, more than three hundred SMEs have signed our letter to the Chancellor. They have provided more than two hundred and fifty testimonials demonstrating powerfully just how essential ERDF funded innovation programmes have been in helping their businesses survive and thrive. This we believe is just the tip of the iceberg across the UK. It is impossible not to conclude from reading these stories that these programmes should be protected.
We are not asking for new money; we are simply asking that part of an existing fund is set aside specifically to cover the loss of the ERDF. Without this, SMEs in many regions will find it much harder to start-up, grow and succeed.
SMEs are the lifeblood of local economies and contribute hugely to regional growth and innovation. If they don’t receive adequate support in all regions of the UK, a key principle of the ERDF, it will fly in the face of the levelling up agenda.”
Deborah O’Donovan, CEO of Chater Smart, who was supported by the ENSCITE programme at University of Derby, said:
“Joining the ERDF funded ENSCITE programme helped Chater Smart to shape the strategy, mission and vision we needed to relaunch our early-stage business.
Having worked for many years in London, as the founder of Chater Smart I returned to Derbyshire to launch a business that will provide local jobs and supplier opportunities as I strongly believe in the importance of levelling up the UK economy.
Female founders and business owners in particular need to be able to access this sort of ongoing business support since we are statistically unlikely to receive external investor funding.”
Claire Forrest, Head of Business Development at Gas Assessment and Training Centre Ltd, who were supported by CEMET at University of South Wales said:
“The CEMET team were fantastic to work with. We worked together to create a virtual reality ‘game’ which is innovative and unique in our industry and beyond. The game puts gas engineers in dangerous situations, safely. It drives the importance of compliance and competence with the goal to reduce gas related accidents and fatalities nationally.
The training combined with the virtual reality product is incredible and never would’ve happened without the CEMET Team. They were extremely competent and efficient to work with. It would be a huge shame to see the likes of CEMET end as without innovation, nothing moves forward.”
Kirsten Antoncich, Clinical Director at Positive Progress said:
“Without the funding, coaching and support, my business wouldn’t exist, it’s as simple as that.”
See our full letter to the Chancellor, including all signatories and some key testimonials from SMEs here.