Country Profile | United Kingdom

Name: United Kingdom                                                                 

Capital: London

Government: Unitary Parliamentary Constitutional Monarchy

Population: 66.040.229

Area: 242.495 km2

GDP per capita: €40.643                              

Currency: Pound Sterling (£)

The United Kingdom has been allocated €16.42 billion from ESI Funds over the current 2014-2020 financial framework, a budget that mounts up to €27.29 billion thanks to the national contribution of €10.87 billion that the country invested. 

This budget is intended to be used through 17 national and regional programmes to:

  • Attract higher levels of private R&I investment.
  • Invest in ICT infrastructure, increasing ICT take-up businesses.
  • Support SMEs by addressing barriers to growth.
  • Help build the market in low-carbon environmental technologies, goods and services.
  • Encourage energy efficiency.
  • Contribute to the delivery of climate change policies, management through targeted agricultural and environmental actions, managing flooding and coastal erosion risks.
  • Promote sustainable and quality employment, support labour mobility, promote social inclusion, combat poverty and discrimination.
  • Invest in education, training and vocational training for skills and lifelong learning.

The €27.29 billion allocation that the UK government is investing until December 2020 mainly focuses on the competitiveness of British SMEs, and aims to improve the job market of the country: sustainable and quality employment in fact will receive a total of nearly €4 billion, slightly below the €4.5 billion that small and medium enterprises are receiving to address barriers to growth from the European Research and Development Fund and the European Agricultural Fund for Rural Development (EAFRD).

Another relevant theme of investments by the UK Government is the educational and vocational training to support the unemployed, especially under 25 years old. As the above chart shows, this focus area is receiving €3.5 billion from the European Social Fund (ESF) only, and an extra €300 million are allocated by the EAFRD. Other significant themes are research and innovation, environmental protection and the enhancements in resource efficiency, with a combined budget of €5.3 billion.

The overall budget for the 2014-2020 financial framework demonstrate that more than one third of all funding is distributed by the European Regional Development Fund, for a total of more than €10 billion. 

From Chart 2 we can further observe that the European Social Fund reaches 32.6%, which is equal to €8.7 billion, while the EAFRD also has a significant share of 25.4%, thanks to its fighting climate change and environmental protection purposes. Minor figures belong to the EMFF and YEI, with a total budget of less than €1 billion and a combined share of just 3.3%. As of May 2019, the United Kingdom’s absorption rate reaches 29%, slightly above the European average. 

However, the prospect of Brexit happening in all sorts of different ways poses in serious doubt the continuation of the EU funding projects in the UK. In fact, one of the possible outcomes of the Brexit negotiations is the so-called “no deal”, an eventuality that will block all ESI-funded projects and future programs. The government has committed to replace outstanding EU funding for the duration of all projects, and the Conservative Party pledged in 2017 to create the “United Kingdom Shared Prosperity Fund” to replace ESI Funds. Even more unpredictability adds up due to the – unexpectedup until eight months ago – participation of the country in the upcoming 2019 European Parliament elections. 

In conclusion, uncertainty reigns on the future of ESI funding in the United Kingdom. However, by the end of October 2019, we will supposedly know the final outcome of Brexit and the implications that will come with it.