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Fashion's post-Brexit funding conundrum

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As Brexit leaves a question mark over European funding for universities and young fashion businesses, Drapers asks how the landscape is changing and what the shift means for upcoming talent in the industry.

On the catwalks of last month’s London Fashion Week, some of the most talked-about shows of the week were those of home-grown design names. Designers such as Molly Goddard, Matty Bovan and Erdem have given the capital a reputation for nurturing new talent, and helping young businesses to grow and thrive.

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Erdem spring 20

Much of the assistance and training these brands access – through higher education fashion courses, British Fashion Council (BFC) funding or business support from organisations such as the London College of Fashion’s business incubator, Centre for Fashion Enterprise (CFE) – are in turn backed by funding schemes from the European Union.

But as the UK hurtles unsteadily towards Brexit, questions are being raised over the future of these funding sources, which have helped to drive business and creative growth in UK fashion. Institutions are looking ahead towards a new landscape, and are assessing the impact the loss may have on the industry, and the challenges and opportunities that will emerge as a result.

The benefits of funding

The UK received more than £5bn of funding from EU programmes in 2016/17, official figures show. Significant streams used within the fashion sector including the European Regional Development Fund (ERDF) – which aims “to strengthen economic and social cohesion in the European Union by correcting imbalances between its regions” and supports innovation, research and small business development.

Higher education body Universities UK reports that universities received £836m in research grants and contracts from EU sources in 2014/15 – the most recent data available – and organisations such as the BFC and CFE all receive funding for specific projects to drive growth and innovation, although precise figures are not publicly disclosed.

While uncertainties around Brexit persist, many fear that when the UK leaves the EU, these institutions will lose access to a huge portion of funding streams that fuel their programmes, and support fashion students and young fashion businesses.  

The funding has been significant, and valuable for the work that we do 

Linda Roberts, London College of Fashion

Kate Smith, project manager at CFE, notes that European funding has been “enormously valuable”. As part of a three-year ERDF-funded project that drew to a close in August, the CFE provided free studio space, business support, and mentoring for fashion and fashion tech businesses in their early stages of growth. Internationally recognised designers such as Molly Goddard, Grace Wales Bonner and Charles Jeffrey Loverboy (lead image) have benefited from the project.

“The funding created a space where businesses can adapt, and be more robust, and where they can prepare to get investment, and scale up safely,” says Smith. 

“[They learn] how to behave across all areas of the business, in a way they wouldn’t be able to do if they were constantly worrying about the costs associated with business support or paying rent.”

Smith says the project supported 325 fashion businesses, and created more than 50 full- or part-time jobs created. 

Linda Roberts, director of business and innovation at LCF, says that in addition to business support for SMEs (small and medium-sized enterprises) and start-ups, ERDF funding also helps LCF to develop its curriculum, collaborating internationally to “bring a wider, global knowledge” into teaching: “The funding has been significant, and valuable for both the work that we do in terms of helping fashion businesses grow and scale, but also in bringing in information, developing our curriculum, and connecting us with European partners and the global fashion industry.”

She also notes the EU funding has allowed for significant tech developments in fashion: “We’ve focused quite a lot on the emergence of fashion and technology, and how technology is helping businesses to change the way they think about their businesses and new business models and the way that fashion is showcased, developed and sold. That is an amazing investment that we have been able to make and has really been supported by our access to ERDF funding.”

There are also concerns among universities that the loss of funding could make international, collaborative approaches more challenging, and limit the scope of courses.

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Molly Goddard spring 20

“Travel is a key facilitator of knowledge transfer and cultural exchange,” says Colin Gale, head of the School of Fashion and Textiles at Birmingham City University. “If our staff and students are not exposed to different markets, mindsets, cultures and business methods, it will damage UK competitiveness and the sophistication of our higher education sector.”

The university has previously used EU funding to collaborate with Italian education and industry partners, as well as working on networking, joint projects and study abroad schemes across Europe, and in Uzbekistan and Thailand.

Amanda Briggs-Goode, head of department for fashion, textiles and knitwear design at Nottingham Trent University, agrees that the loss of EU funding may damage the international reach of the UK’s fashion network: “We are worried that our [international] relationships and community will narrow. For example, our fashion and textile courses have the largest proportion of study-abroad students in the school. It’s this diversity of people moving through our fashion courses that brings creativity and innovation [to the industry] as well as making it a stimulating and positive place to be.”

Government promises

Although the post-Brexit landscape remains unsettled, the government and the EU have made promises to existing beneficiaries of funding. If the UK leaves the EU with a deal, existing funding has been guaranteed. The ERDF is assigned to specific fixed-term projects, and those that have already been granted funding will receive the amount promised to them regardless of when the UK leaves the EU.

The BFC, for example, has funding guaranteed until 2021 for its “Showcasing Fashion through Strategic Partnerships” project, which it says “supports designer fashion businesses to maximise the growth of their businesses by increasing their competitiveness and international sales”. 

If the UK leaves the EU without a deal, the government notes that “UK organisations would no longer receive future funding for projects under EU programmes”, so funding would stop immediately. Although the government has promised that EU funding would be replaced with alternative money from the UK government, concerns remain.

One senior figure from a leading fashion university in the UK expressed frustration over the continuing lack of clarity around the future of funding, and said that – as with so many areas of Brexit – the uncertainties make planning for the future extremely challenging.

ERDF funding doesn’t allow for an agile delivery

Kate Smith, Centre for Fashion Enterprise

The government is in early discussions over replacement schemes to plug gaps in funding once EU programmes have lapsed. However, these are only at the consultation stage. Their future application remains uncertain, and is unlikely to be decided by 31 October.

One of these schemes is the Shared Prosperity Fund, which was put in front of the House of Commons as a briefing paper in early September. The fund has a similar aim to the ERDF: to reduce inequalities and disparities between regions.

The industry is planning for the future and looking at alternative avenues of funding to ensure it can continue to provide support.

LCF, for example, is in the midst of launching its ambitious Fashion District in east London. Working in collaboration with and funded by several stakeholders ranging from local councils to property developers, the scheme will provide skills training and affordable workspaces for fashion businesses.

“We will need to work in partnership with others, and we will need to connect resources across a number of organisations and institutions, bringing people together to benefit from sharing a community and co-operation,” says Roberts.

Despite the challenges, the outlook is not as bleak as it may appear. The prospective new streams may offer more flexibility to the funding universities and other institutions are able to access.

“ERDF funding doesn’t allow for an agile delivery,” says the CFE’s Smith. “You put in an application to do something specific, and then you very much have to deliver to that plan. It can be slightly inflexible.

“When things in the marketplace or industry come up, we’re not able to adapt to them – things we never saw coming can change the marketplace quite dramatically.”

Roberts agrees: “We’ve always found it very difficult to administer ERDF funding: it requires large resources and a lot of effort and expertise.”

She explains that the inflexibility of the funding does not suit the rapidly shifting creative fashion sector – and that future funding avenues, whatever they may be, will hopefully allow more flexibility in their application.


The Drapers Verdict

As with so many aspects of Brexit, the future of funding for upcoming talent in UK fashion remains uncertain. However, the positive impact schemes such as the European Regional Development Fund have had on the UK’s fashion industry is clear. 

The government must ensure that those places incubating the next generation of talent retain their ability to back further growth, and grasp the opportunity to provide a more flexible, agile funding option to even better support fashion’s new talents, businesses and technologies.

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