UK suspended payments from £3bn EU development fund days after Brexit vote

Payments from a £3bn European development fund were suspended indefinitely by the UK Government just days after the vote to leave the EU, The Independent can reveal.
In a move that exposes the almost immediate impact of Brexit on the UK economy, businesses said they had been told they would not now receive money that was due to be paid out under the European Regional Development Fund (ERDF).
The fund, designed to promote economic growth, has to be matched by payments from member states and there was speculation the UK Treasury may be concerned about whether the Government can afford to continue paying its share, particularly if it had to meet any shortfall for schemes which extend into the post-Brexit period.
A letter to the Chancellor from a group of London-based companies, which has been seen by The Independent, appealed for the “pause” to be lifted.
The letter – written by John Spindler, chief executive of non-profit firm Capital Enterprise, and signed by several other company bosses – said £3.7m in funding had been agreed in March 2016 to help provide expert support to more than 600 tech start-ups in the city under a scheme called CASTS.
“Until last week we were on track to sign the full funding agreement in mid-July,” the letter said.
“So it was with alarm that we heard … that, because of the referendum result, the Department of Communities and Local Government has notified the GLA [Greater London Authority] to inform Capital Enterprise that ERDF projects like CASTS, were to be put on ‘pause’ for an indefinite period.
“We would urge you to unblock this funding which is vital to the tech community in London.
“[The referendum] result has created a lot of uncertainty and raised questions for what it means for tech businesses in London.”
It is understood the Department for Communities and Local Government (DCLG) and the Mayor of London’s office have also written to the Treasury asking for the suspension of payments to be lifted.
The current ERDF began in 2014 and is due to run until 2020, by which point it is expected that the UK will have left the EU. The total amount of available from the fund was €3.6bn (about £3bn), but about 20 per cent is thought to have been given out already. This means that just under €3bn (about £2.5bn) is left.