A £1.4bn Brexit alternatives fund launched final 12 months by Rishi Sunak has been criticised as “smoke and mirrors” after an investigation by the Monetary Occasions confirmed that cash was being supplied by current authorities schemes.
As chancellor, Sunak, now prime minister, introduced a “new £1.4bn World Britain Funding Fund supporting transformative financial exercise” within the 2021 autumn Funds.
As a part of efforts labelled “seizing the alternatives of Brexit and advancing World Britain”, the Funds paperwork acknowledged that the fund “will present grants to encourage internationally cell firms to put money into the UK’s vital and most revolutionary industries, together with life sciences and automotive”.
However the FT has discovered that a lot of the grants to this point have been allotted by means of current programmes — albeit with new cash added in some instances on the final spending evaluate — successfully rebadging funding beneath the “World Funding” banner, with recipients usually unaware that they have been being supported by means of the fund.
In a freedom of knowledge request, the FT requested for the beneficiaries of the GBIF, which confirmed six tasks together with factories and operations deliberate by firms, resembling sustainable know-how producer Johnson Matthey and automotive teams Britishvolt and Ford.
The businesses have had funds dedicated by the Automotive Transformation Fund, a devoted scheme arrange in 2020, in addition to from different current pots of cash.
Offshore wind investments have been backed by the offshore wind manufacturing funding assist scheme and regional progress funds.
In some instances, the cash was dedicated to the businesses even earlier than the launch of the GBIF in April.
Jonathan Reynolds, Labour’s shadow enterprise secretary, stated: “That is yet one more disappointment for companies at a time when clear management and stability is a strict necessity. This tiresome Tory tactic of smoke and mirrors over actual tangible assist continues to burden UK companies with infinite confusion and chaos.”
Present funds have totally different goals to the acknowledged intention of the GBIF, with the ATF open to any UK-registered firm for British tasks to assist develop an electrified provide chain. In the meantime, the offshore wind manufacturing scheme is open to offshore wind part producers in deprived or disadvantaged areas of the UK.
Though a few of these funds have been “paid out”, in response to the FOI knowledge, it is usually the case that a few of these funds have been dedicated however not paid, given sure situations hooked up.
Within the case of Britishvolt, ministers supplied £100mn however no cash had been paid out because the battery start-up has but to satisfy industrial goals, together with starting development work on its website in Blyth, Northumberland.
The Division for Enterprise, Power and Industrial Technique stated there had been new cash dedicated to varied funds, which was now counted as beneath the GBIF however declined to say how a lot.
A BEIS spokesperson stated the Brexit alternatives fund “introduced collectively numerous pre-existing, sector-specific funds beneath one banner”.
“A good portion of latest funding was agreed for these current funds within the 2021 Spending Evaluate. It’s not the case that every one this scheme-specific cash was beforehand introduced after which later rebadged,” he stated.
“The World Britain Funding Fund was established to assist drive non-public funding into industries the place the UK has each pure strengths and geographic unfold.”
In final 12 months’s autumn Funds, the federal government stated that greater than £800mn of the GBIF would go to supporting funding within the electrification of UK automobiles and their provide chains, and to assist funding in zero emission car manufacturing, gigafactories and the electrical car provide chain.
It stated an extra £354mn would increase funding in life sciences manufacturing, and as much as £230mn within the offshore wind sector.
The FOI knowledge confirmed that the full worth of grants supplied to this point added as much as £180mn, or roughly 13 per cent of the full worth of the fund.
“The GBIF was established to assist drive non-public funding into industries the place the UK has each pure strengths and geographic unfold,” the FOI knowledge stated.
The FOI knowledge additionally confirmed that there have been no new workplaces to take care of the fund’s working capabilities, and that BEIS “at present makes use of roughly 29 full time staff’ value of time to handle the supply of the funds”.
Ford and Britishvolt declined to remark.