A £1.4billion Brexit Opportunities Fund launched last year by Rishi Sunak has been criticized as ‘smoke and mirrors’ after a Financial Times investigation showed the money was provided by existing government programs.
As Chancellor, Sunak, now Prime Minister, announced a “new £1.4bn UK Global Investment Fund supporting transformative economic activity” in the 2021 Autumn Budget.
As part of efforts titled ‘Seize the opportunities of Brexit and move global Britain forward’, the budget documents said the fund ‘will provide grants to encourage internationally mobile businesses to invest in critical and most innovative industries in the world. UK, including life sciences and automotive”. .
But the FT has found that much of the grants so far have been allocated through existing schemes – albeit with new funds added in some cases during the last spending review – effectively lowering investments under the “Global Investment” banner, with recipients often unaware that they were being supported by the fund.
In a Freedom of Information request, the FT asked for beneficiaries of GBIF, which showed six projects comprising plants and operations planned by companies, such as sustainable technology maker Johnson Matthey and automotive groups Britishvolt and Ford.
The companies received committed funds from the Automotive Transformation Fund, a dedicated program set up in 2020, as well as other existing prize pools.
Investments in offshore wind have been supported by the offshore wind manufacturing investment support program and regional growth funds.
In some cases, the money was committed to companies even before the launch of GBIF in April.
Jonathan Reynolds, Labour’s shadow business secretary, said: ‘This is yet another disappointment for business at a time when clear leadership and stability are a dire necessity. This tedious Tory tactic of smoke and mirrors over real, tangible help continues to plague UK businesses with endless confusion and chaos.
The existing funds have different purposes than GBIF’s stated purpose, with the ATF being open to any UK-registered company for UK projects to develop an electrified supply chain. Meanwhile, the Offshore Wind Turbine Manufacturing Scheme is open to manufacturers of offshore wind components in disadvantaged or disadvantaged areas of the UK.
Although some of these funds have been “disbursed”, according to FOI data, it is also true that some of these funds have been committed but not disbursed, given certain conditions attached.
In the case of Britishvolt, ministers have offered £100m but no money has been forthcoming as the battery start-up has yet to meet its business targets, including the start of construction work at its site in Blyth, Northumberland.
The Department for Business, Energy and Industrial Strategy said new money had been committed to various funds, which were now accounted for under GBIF, but declined to say how much.
A BEIS spokesperson said the Brexit Opportunity Fund “brought together a number of pre-existing and sector-specific funds under one banner”.
“A significant portion of new funding was agreed to for these existing funds during the 2021 spending review. It is not the case that all of this program specific money was announced previously and then rebadged later,” a- he declared.
“The Global Britain Investment Fund was set up to help stimulate private investment in sectors where the UK has both natural strengths and geographic spread.”
In last autumn’s budget, the government said more than £800million from GBIF would be used to support investment in the electrification of UK vehicles and their supply chains, and to support investment in manufacturing zero-emission vehicles, gigafactories and the electric vehicle supply chain. .
He said a further £354m would boost investment in life science manufacturing and up to £230m in the offshore wind sector.
FOI data showed that the total value of grants offered to date was £180million, or around 13% of the total value of the fund.
“GBIF was set up to help stimulate private investment in industries where the UK has both natural strengths and geographic spread,” FOI data says.
The FOI data also showed that there were no new offices to handle the fund’s operational functions and that BEIS “currently employs around 29 full-time staff to manage fund distribution”.
Ford and Britishvolt declined to comment.