AS 2016: EU project guarantees subject to test

The government gave a mixed message on its stance towards EU-funded projects, Hammond saying that guarantees would be extended to all contracts “signed after the Autumn Statement and before the UK’s departure from the European Union”, but only if they were deemed important enough to the country.

He said “…the government has guaranteed all European Structural and Investment Fund projects signed before the Autumn Statement, and has also provided a guarantee for all projects signed after the Autumn Statement and before the UK’s departure from the European Union, if they provide good value for money and are in line with domestic strategic priorities. This guarantee ensures the North’s LEPs have the certainty they need to continue prioritising this funding to support local growth.”

The wording around domestic priorities and value for money could be taken as leaving a get-out clause for the government to tear up agreements on specific projects at the time of exiting the EU if it wants to save money.

Hammond continued: “The government is now confirming arrangements for the £400m Northern Powerhouse Investment Fund which, in collaboration with the LEPs in the region and the British Business Bank will invest in local smaller businesses. This will be supported by funding from the European Regional Development Fund and the European Investment Bank. The government can now confirm that the Fund will make its first investments by early next year. This fund, combined with the North East’s fund for SMEs, will facilitate over £500m of investment in Northern businesses in the coming years.”