Chilling in Shoreditch. Following the Brexit vote, there are indications that EU funding aimed at start-ups in the UK is being put on pause
The dust has barely settled on the UK vote for Brexit and already it is reported that sources of STEM and entrepreneurship funding are feeling the impact.
There was perhaps no community more determined to stay in the EU than the UK tech start-up community, which is principally centred in places like London’s Shoreditch or Silicon Roundabout district.
But the reality is that start-ups are everywhere across the UK and its regions, not just in London, and membership of the EU enabled start-ups and researchers to tap into EU-wide funds to support entrepreneurial endeavor.
For them, the opportunity to trade openly in Europe, travel freely and crucially tap into the EU’s 500m-strong labour market at a time when talent is scarce, is about to fade away.
But, according to a BBC report, more salt is now being applied to the wound.
Groups in the UK that rely on EU funding for tech projects have been told that the money is “on pause” in the wake of the Brexit vote.
Email warning on funding
Coast to Capital, a group that allocated EU funding around the south-east coast of England, is understood to have issued an email warning of a funding freeze.
Coast to Capital laid the blame on the recent EU referendum and change of government in the UK. The group said that it may not be able to allocate its current round of €60m in the near future. This funding also needs to be matched by the corporate sector and there are concerns that they will also withdraw from allocating funds.
For its part, the UK Treasury has insisted that funding has not been stopped.
The UK Treasury said that payments from the European Regional Development Fund have not stopped and that as long as the UK remains a member of the EU there will be no change to programme.
The BBC reported, however, that some government departments are waiting for a formal announcement on how funding will continue before signing agreements.
The logjam may be a symptom of over-zealousness or a heightened sense of responsibility held by officials in the confusing aftermath of the Brexit vote.
The situation is creating a lot of uncertainty for entrepreneurs and, as long as it continues, vital research projects and seed funding for start-ups could be impacted in the UK.
Shoreditch image via Shutterstock
