Across the bay from Port Talbot’s steelworks, one of the biggest metal plants in Europe, academics at Swansea University are laying the foundations of Wales’s green economy.
In campus labs, academics are inventing materials that stop steel corrosion to extend the life of machine parts and support sustainable industry. Nearby stands an “Active House” that can generate its own renewable energy.
“We’re not focusing on just short-term goals, we’re thinking about how we can develop capability over a number of years,” said Justin Searle, technology director for Specific, a university project that works with businesses to trial new approaches to green construction.
But these projects — along with more than 150 others in the UK — face imminent closure, as the EU funding that has supported them finally tapers out this month.
European structural investment funds (Esif) — pots of money allocated by Brussels to support development in member states — were set up to finance projects by universities, public bodies, the private sector and community organisations that promoted long-term regional growth.
Brussels has since 2014 ploughed £950mn into at least 166 university-led projects in England and Wales, according to sector body Universities UK, with the aim of connecting academic research with business to drive economic growth.
But since formally leaving the EU in 2020, Britain can no longer access the funds. While many projects have continued to receive money under pre-existing allocations since Brexit, the last of these are due to run out at the end of March.
Without that money, university leaders say projects that generate millions of pounds annually for the economy, and employ hundreds of people in cities from Swansea to Birmingham to Newcastle, will not survive.
In its place, the UK government has set up the £2.6bn shared prosperity fund (SPF). However, it has different funding priorities and university leaders say the substitution has left many projects short.
Once gone, sector leaders say, most of these innovative research projects will not return, hobbling regional development and progress to net zero and skills targets, and leaving the innovation sector with a funding hole.
Paul Boyle, Swansea’s vice-chancellor, said the sector was “on the precipice of a disaster. I couldn’t think of another time when such a significant amount of valuable research and innovation work will be lost.
“This is despite the UK government’s stated position that research and innovation is at the heart of its plans to drive economic growth.”
Boyle estimates the loss of EU funding will lead to the closure of about 50 projects that employ 240 people in Wales’ second city.
“It’s a huge blow,” said Shareen Doak, co-ordinator of Swansea’s Celtic Advanced Life Science Innovation Network (Calin), an Esif-funded project that carries out bioscience research for local companies.
“It’s not just undertaking research for research’s sake, it’s about developing impact for local economies,” she added.
Since 2017, the network has partnered with almost 200 companies on 50 projects, in areas from drug discovery to food hygiene. Doak said it had driven £6mn in investment to partner companies during the past five years.
But with no replacement funding, Calin faces closure when Esif runs dry this month. Staff are already leaving for new jobs.
Jane Robinson, pro-vice chancellor for engagement and place at Newcastle University, warned of the pitfalls of closing such programmes, noting that “you have to dismantle all these structures — the skill base, the relationships, the networks”.
At-risk projects at Newcastle include the Northern Accelerator, an incubator for start-up businesses, or “spin outs”, from universities in the North East.
Britain’s ambition to become a “science superpower” meant replacements would probably spring up but starting afresh would be costly and unnecessary, said Robinson.
“You spend the next few years trying to build it back up. If you just had continuity, it would be a much better use of public money.”
University leaders also warned that the end of Esif would leave British innovation with a longer-term funding gap, and that the structure of SPF — which is worth less than the £1.5bn previously received annually — risked hitting their institutions.
Unlike EU funds, which were handed out centrally, the SPF is distributed through local authorities, which can be influenced by local priorities when deciding allocations.
And whereas Brussels distributed investment in six-year cycles, enabling collaboration over time, UK prosperity funds have been guaranteed only for three, limiting the scope for co-ordinated projects.
They also tend to favour projects with immediate impact in communities, so ambitious projects such as Calin — which involves six universities across Ireland and Wales — struggle to fit the bill.
The government said it recognised the “vital role” of universities in local growth and was “encouraging them to engage with councils to secure UKSPF funding”.
It added: “Councils decide what projects to fund through UKSPF and are working closely with partners, including universities, to deliver in their areas.”
In Newcastle, Robinson is optimistic about pulling together cash from new sources, including the private sector, to replace EU funding.
But the future of projects remains uncertain: Northern Accelerator has money from Research England, the UK government body, only until September, while in Swansea a swath of R&D labs faces a cliff-edge. Researchers fear infrastructure that took years to build will simply be abandoned.
Universities UK has called for immediate “bridging” funding so projects can continue. It estimates that £170mn would support the 166 projects deemed at-risk until 2024-25.
But looking forward, sector leaders believe universities and ministers need to work out new ways to finance research, or else hurt the next generation of innovators.
“The funding stops, but there’s still demand,” Robinson said. “We have to think about how we fill that gap.”