Tech groups told Europe funds 'on pause'

A pile of Euros Image copyright Thinkstock
Image caption Allocation of European funding has been put on pause by some government departments, the BBC has learned

Groups that rely on European funding for tech projects have been told the money is "on pause" in the wake of the Brexit vote.

An email warning about the funding freeze was sent to a large group of stakeholders by Coast to Capital, a group that allocates European funding around the south-east of England.

It blamed the recent Brexit referendum and the change of government.

The Treasury insisted that funds had not been stopped.

But the BBC understands that some government departments are waiting for a formal government announcement about how funding will continue before signing any new agreements.

"The Treasury has not stopped any payments from the European Regional Development Fund and to suggest it has is simply untrue," said a representative.

"The UK remains a member of the EU, and that means no immediate change to EU programmes.

"We recognise the need to bring any uncertainty to an end as soon as possible, however, and we have been working urgently to understand the future implications to programmes.

"We will make an announcement on EU funding soon."

The email from Coast to Capital - seen by the BBC - warns that it will not be able to allocate its current round of 60m euros in "the near future".

"A combination of the recent 'Brexit', the change of prime minister and the cabinet changes resulting in a new secretary of state has led to a 'pause' on issuing new calls and on signing new grant funding agreements nationwide," it says.

Coast to Capital's funds are allocated by the Department for Communities and Local Government (DCLG).

John Spindler, who runs Capital Enterprise, an umbrella group for 600 technology start-ups that had been due to receive £3.7m from the European Regional Development Fund, was one of those to receive the email.

"We have been told the money is on pause and, as the funding needs to be matched by the corporate sector, we are concerned that they will also withdraw," he said.

Image copyright Getty Images
Image caption A lot of the European Regional Development Fund goes on rural broadband projects

"It is not a great signal to be downsizing the tech community," he said.

Other groups that allocate funding, including the Greater Cambridge Growth Hub, have also been told signing agreements on new projects is being paused, pending a decision on how future funds will be allocated.

"We are waiting for further guidance from the DCLG," a representative said.

Cumbria, South Yorkshire, Scotland and Wales have all in the past benefited from the European Regional Development Fund to build superfast broadband networks.

Cornwall is one of the biggest beneficiaries and has been given a total of £2.5bn since 2007.

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