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University leaders have condemned European Commission plans to cut the European Union's £67 billion Horizon 2020 research and innovation budget.
In a new legislative proposal, the EC has tabled proposals to divert money away from Horizon 2020 into a European Fund for Strategic Investments.
According to the European Universities Association, the plan would result in funding from Horizon 2020 being shifted over to make up around a third of the proposed £6 billion EFSI budget.
Universities UK and the University Alliance warned that such a move would have a damaging effect on UK and EU research performance.
UUK President Professor Sir Christopher Snowden pointed out that UK universities and research centres stand to lose out as they have been forecast to receive around £2 billion in the first two years of Horizon 2020. Competitors outside of the EU, such as China, are investing more in research and innovation rather than making cuts, he added.
"Cutting the Horizon 2020 budget at this stage would risk harming the performance of the whole European research system. Public investment in research and innovation boosts the prosperity and growth potential of the economy.
"It is by investing in world-leading research and innovation that the EU will help secure growth and respond to changing needs," he said.
Maddalaine Ansell, Chief Executive of the University Alliance, said a cut in Horizon 2020 would have a "significant negative impact" on UK universities which receive up to a fifth of their external research funding from the EU.
"Investment in science and research leverages private investment and leads to deep and long-lasting social and economic benefits, including job creation and growth. Many Horizon 2020 funding streams are directed towards those parts of the economy with the greatest potential to grow sustainably. They give particular support to SMEs. A reduction to the Horizon 2020 budget will impact on universities' capacity to drive innovation within SMEs and to promote growth in their local areas and region.
"This latest development is a backwards step," she said.
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