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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 Instances confirmed that cash was being supplied by present authorities schemes.
As chancellor, Sunak, now prime minister, introduced a “new £1.4bn International Britain Funding Fund supporting transformative financial exercise” within the 2021 autumn Price range.
As a part of efforts labelled “seizing the alternatives of Brexit and advancing International Britain”, the Price range paperwork said that the fund “will present grants to encourage internationally cell firms to put money into the UK’s essential and most progressive industries, together with life sciences and automotive”.
However the FT has discovered that a lot of the grants to date have been allotted via present programmes — albeit with new cash added in some circumstances on the final spending overview — successfully rebadging funding beneath the “International Funding” banner, with recipients usually unaware that they have been being supported via the fund.
In a freedom of data request, the FT requested for the beneficiaries of the GBIF, which confirmed six tasks together with factories and operations deliberate by firms, corresponding to 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 present pots of cash.
Offshore wind investments have been backed by the offshore wind manufacturing funding help scheme and regional development funds.
In some circumstances, the cash was dedicated to the businesses even earlier than the launch of the GBIF in April.
Jonathan Reynolds, Labour’s shadow enterprise secretary, mentioned: “That is 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 countless confusion and chaos.”
Current funds have completely different goals to the said 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 line with the FOI information, it is usually the case that a few of these funds have been dedicated however not paid, given sure circumstances hooked up.
Within the case of Britishvolt, ministers provided £100mn however no cash had been paid out because the battery start-up has but to fulfill business goals, together with starting building work on its website in Blyth, Northumberland.
The Division for Enterprise, Power and Industrial Technique mentioned there had been new cash dedicated to numerous funds, which was now counted as beneath the GBIF however declined to say how a lot.
A BEIS spokesperson mentioned the Brexit alternatives fund “introduced collectively a lot of pre-existing, sector-specific funds beneath one banner”.
“A good portion of recent funding was agreed for these present funds within the 2021 Spending Evaluation. It’s not the case that each one this scheme-specific cash was beforehand introduced after which later rebadged,” he mentioned.
“The International 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 Price range, the federal government mentioned that greater than £800mn of the GBIF would go to supporting funding within the electrification of UK automobiles and their provide chains, and to help funding in zero emission car manufacturing, gigafactories and the electrical car provide chain.
It mentioned an additional £354mn would enhance funding in life sciences manufacturing, and as much as £230mn within the offshore wind sector.
The FOI information confirmed that the overall worth of grants provided thus far added as much as £180mn, or roughly 13 per cent of the overall 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 information mentioned.
The FOI information additionally confirmed that there have been no new workplaces to cope with the fund’s working capabilities, and that BEIS “presently makes use of roughly 29 full time workers’ price of time to handle the supply of the funds”.
Ford and Britishvolt declined to remark.
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