LGA urges government to set up EU fund replacement pot

5 Jul 19
The “clock is ticking” on replacing EU regional funding, council leaders have warned.

When the current package runs out in eighteen months’ time (December 2020) the more deprived regions who rely on the funds will be faced with a black hole so the government must act to set up a replacement urgently, the Local Government Association has said.

English regions received £5.3bn in funding from the European Structural and Investment Fund between 2014-2020.

The Conservative’s 2017 manifesto vowed to set up a new fund and last summer the government committed to consulting on the so-called UK Shared Prosperity Fund by the end of 2018, but no consultation has taken place.

“The clock is ticking for the government to set out a firm plan to replace this funding into the next decade and beyond,” said Kevin Bentley, chair of the LGA’s Brexit taskforce.

“Brexit cannot leave local areas facing huge financial uncertaintyas a result of lost regional aid funding. This funding has been used by local areas to create jobs, support small and medium enterprises, deliver skills training, and invest in critical transport and digital infrastructure and boost inclusive growth across the country,” he added.

The LGA pointed to initiatives such as the ‘Nottingham Jobs’programme, which received ESIF funding and subsequently increased the city’s employment rate by 5.6% in its first four years, compared to a 3.7% increase in the rest of England.

Ongoing delays and uncertainty on the detail of the UKSPF is a “huge concern” for local areas because reductions in national funding has made them increasingly reliant on ESIF funds.

Communities secretary James Brokenshire was pressed on the plans for the UKSPF in April but refused to go into detail about whether the new fund would be equal to the current funding arrangements from the EU.

An MHCLG spokesperson said: “We know the importance of local growth funding to local places and of providing certainty on its future.

“That’s why we are talking to interested parties on the design of the UK Shared Prosperity Fund to ensure it can support those parts of our country whose economies are furthest behind.”

Stephen Kinnock, chair of the All-Party Parliamentary Group on post-Brexit funding, previously told PF that he had not been granted a meeting with the minister in charge of the UKSPF, Jake Berry. 

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