How much do the regions of the UK receive in EU funding?
2nd Aug 2016
UK regions don't receive a consistent level of funding from the EU. It changes from year to year depending on the number of funding applications from each region. Funding which goes to one region might also indirectly benefit another. It is possible to get snapshots of how the various funding programmes distribute across the UK, but these aren't set in stone.
There is no consistent picture of how much each region of the UK receives in funding from the EU.
The figures change substantially from year to year as they are often based on individuals and projects making applications either directly to the EU or to various government bodies in the UK, depending on how the funding is set out.
A lot of funding which goes to UK-wide projects or even other projects in the EU might also benefit the individual regions of the UK, for example research funding or funding to improve national power supplies.
The European Commission told us that to try and take a single year and use it as an example of what that region usually receives from the EU would be “misleading” and “grossly inaccurate”.
So where does the funding come from?
Treasury figures show that the EU was expected to have provided £4.4 billion, or €5.7 billion, in public sector receipts to the UK in 2015.
This money comes mainly from several large funding programmes: the European Agricultural Guarantee Fund, European Agricultural Fund for Rural Development (EAFRD), European Social Fund and European Regional Development Fund.
The European Social Fund and the European Regional Development Fund make up the bulk of the EU’s 'European Structural and Investment Funds' programme. This is the main fund which provides money specifically to regions of the UK.
Meanwhile the European Agricultural Guarantee Fund and the European Agricultural Fund for Rural Development are the funds which support the EU’s Common Agricultural Policy, providing support for farmers.
There are also other sources of funding from the EU, such as research funding and funding from the European Investment Bank, but they make up a much smaller percentage of the funding received by the UK.
European Structural and Investment Funds
European Structural and Investment Funds include the European Regional Development Fund, European Social Fund, the European Maritime and Fisheries Fund and the Youth Employment Initiative, as well as some funding from the European Agricultural Fund for Rural Development.
Structural funds are allocated to various regions of the UK depending on the size of the local economies, measured by their GDP per head of the population.
From these funds the UK and Gibraltar were allocated around €16 billion for 2014-2020.
Of that, England has been allocated roughly €10.6 billion, Wales €3 billion, Scotland €1.8 billion, Northern Ireland €741 million and Gibraltar €11 million. Some other money from the fund was also allocated to projects and industries spanning the whole of the UK.
The government recently published rough figures for how money for the two main funds—the European Regional Development Fund and the European Social Fund—was spread out across England in the EU’s 2014-2020 budget. It also included how the money was broken down across Local Enterprise Partnership areas, areas where businesses and local government work together to improve job opportunities and the local economy.
The main aim of Structural and Investment funds is to make the economy more productive, which has been identified as an area in need of improvement. This is done through investing in a variety of programmes, including low-carbon environmental technologies, supporting small businesses, increasing ICT use by businesses and encouraging sustainable land use and management.
The main sources of all EU funding to the UK is through the Common Agricultural Policy (CAP).
The CAP includes payments made through the European Agricultural Guarantee Fund and also the European Agricultural Fund for Rural Development to applicants in the UK. In 2015, Treasury figures show that 70% of all EU money received by the UK's public sector was from these two funds.
Across the EU Direct Payments, mainly from the European Agricultural Guarantee Fund, are designed to help stabilise farmers’ incomes when agricultural markets are volatile. This money makes up around 70% of the CAP and is fully funded by the EU.
Rural development programmes encouraging projects including tourism, internet coverage in rural areas, and organic conservation are financed through the European Agricultural Fund for Rural Development. These projects are usually partly financed by the EU and partly through national, regional or private funds.
The CAP money which the UK receives from the EU is paid out to applicants by government organisations within each devolved government. Records held by Defra show how much was paid out to beneficiaries of the scheme by each of the four Paying Agencies around the UK. In 2015 this amounted to €1.9 billion in England, €283 million in Wales. €612 million in Scotland and €319 million in Northern Ireland.
One of the main mechanisms for research funding within the EU is through the Horizon 2020 programme. In 2015 the EU provided €1.2 billion in funding to the UK from this programme. The top three organisations who received the most funding from the programme in the UK are Cambridge University, University College London and Imperial College.
According to the European Commission, the UK suffers from underinvestment in public research and development projects in comparison to other advanced EU countries and the United States. In 2014 the Commission put the level of this investment at 0.58% of GDP in comparison to the EU average of 0.72%. This has also declined since 2009 when it was 0.65%. Private research and development has also declined since 2001.
European Investment Bank
Although not a part of the European Commission, the European Investment Bank (EIB) is a key partner to it, working with it to deliver funding and financing a number of projects in the UK.
In 2014 the EIB enabled over £6 billion in investment to projects across the UK. This included their biggest ever single loan, amounting to £1.5 billion to support a project by the National Grid to improve energy transmission and upgrade the electricity infrastructure.
Perhaps unsurprisingly then the majority of the EIB investment in the UK that year—48%—went on energy projects. 26% went on transport and telecommunications and 15% went on water, sewerage, waste, and urban development projects. The rest went on projects in areas including educations, services and agriculture.
In 2015 the EIB provided its largest ever single loan for a university, this was for Oxford University to invest in improving and expanding the existing teaching facilities and totalled £200 million.
Some funding benefits the regions without being allocated to them
The European Commission told us that the whole point of the EU budget is “to do things Member States cannot do alone and which add value for all.”
Some funding which is allocated on a UK or EU-wide basis can also have an impact on specific regions without being allocated there directly. For example money spent on cancer research in Sweden might benefit people living in Somerset.