Britain sucked toward billion pound innovation funding Brexit black hole

Lynsey Barber
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The country relies on a large share of funding from Europe (Source: Getty)

British business faces a billion pound funding black hole for research and development that risks leaving the nation trailing behind the rest of Europe when it comes to creating world leading technological and scientific innovation.

More than a fifth of the UK’s £8bn competitive R&D funding in the last decade has come from Europe, but that supply will likely dry up if Britain were to vote to leave Europe, according to a new report detailing how much some of Britain’s biggest businesses stand to miss out on.

Network Rail, Samsung, Amec Foster Wheeler, Procter and Gamble and Huawei are among those which rely solely on funding from Europe and have received millions of pounds over the last decade.

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BT, BP, BAE Systems and Apple chip maker ARM, have relied on more than half of their competitive R&D funding coming from Europe. While firms such as Airbus and Rolls-Royce received a smaller share of that funding from the EU, they have been one of the UK’s biggest beneficiaries from the continent in cash terms, winning £36m and £53m respectively.

The UK has become the second biggest beneficiary of funding from the European Commission (EC) and European Research Council (ERC) of any country in Europe just behind Germany, however, that means the nation has become more dependent on this funding and which hides a lack of investment from homegrown sources.

“Our success in gaining European funding is masking serious deficiencies not only in government commitment to R&D but also to the commitment of the wider business community to fund investment in our future prosperity,” said the report, compiled by technology research company Digital Science, which works with Cambridge, Harvard and Cornell universities, among others.

A break up with Europe would likely result in less funding, as just seven per cent of current European funding goes to non-member states. A quarter of all publicly funded research in the UK currently comes from the EU. Digital Science estimates Britain would face a £1bn deficit in terms of both corporate research and the work taking place at the country’s top universities.

While savings would be made on membership of the EU if Brexit occurred, the cash would have to make up for the loss of funding in order for overall R&D funding levels to remain the same.

London and the south east would be hit hardest, with the majority of research institutes located in these areas, however, the effect would be widespread across the UK. World renowned Cambridge and Oxford receive 20 per cent and 23 per cent of their competitive funding from the EU, respectively.

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According to the research, Oncology - an area where Britain is a world leader - could lose as much as 41 per cent of its funding which it has received from the EU. Economics could be one of the biggest losers, with an astonishing 94 per cent of its funding from Europe, while nanotechnology benefits from 62 per cent of its funding from EU sources.

The group also warns that the UK risks hurting its ability to collaborate on research with those at other institutions abroad as a result of the reduced funding.

“EU funding criteria are written to take account of the legislative landscape across member states; they are often also designed to foster relationships between EU countries. Being less central to these relationships, as the UK may not be a party to so many grants, will sideline the UK. The effect may be subtle at first, but without sustained funding to support travel and collaboration the UK will become a more challenging partner with which to work,” the report said.

It follows similar warnings from a cross-party group of MPs last month which said the shortfall in funding was unlikely to be covered by future governments. It also found that between 2007 and 2013, the UK contributed more than £4bn for European research projects but benefited from £7bn in return.

It adds to growing calls from the country’s top scientists, including professor Stephen Hawking, that leaving the EU would be a disaster for science.

“The UK’s economy is increasingly a knowledge and information economy and the UK’s research base is, in many ways, one the UK’s greatest hopes for long-term prosperity," said Digital Science managing director Daniel Hook.

"We don’t want the UK to become the 'poor cousin', unable to host collaborators or unable to travel due to lack of funding. Rather than allowing the UK to gain an even better position on the global stage by having an excess of funds to deploy, EU funds have been used to prop up and cover systemic issues with how we chose to fund research in the UK both at a governmental and corporate level. Brexit, and the loss of EU funding for the UK’s research base, represents a number of severe threats to leading British success stories in the research sector, unless the UK government makes up the shortfall.”

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