Commission calls for trebling of post-Brexit deprivation fund

27 Feb 20

A commission set-up to reduce inequality has called for the trebling of the UK’s proposed post-Brexit investment fund to help “level-up” economic disparities across the UK.

Funding increase needed to reduce regional inequalities, commission concludes

A commission set-up to reduce inequality has called for the trebling of the UK’s proposed post-Brexit investment fund to help “level-up” economic disparities across the UK.

The 2070 Commission’s final report into the north-south inequality in the UK, recommends the size of the post-Brexit Shared Prosperity Fund is trebled from the expected £5bn to £15bn per year over 20 years.

The Shared Prosperity Fund has been proposed by government to replace EU structural funding when the UK departs from the European Union.

However, the commission’s report said the current expected size of the new fund would be insufficient to rebalance the economy.

The report said: “There is a strong case for the creation of a UK on a scale equivalent to the German Solidarity Fund linked to an explicit set of spatial and regional priorities, which was introduced to help the unification process.

“An equivalent fund for the UK with the same intent of reducing inequality is estimated to be in the order of £15bn annually.”

The commission also recommends updating current procedures for assessing projects funded by government.

This would include an update to the guidelines on assessment criteria to include well-being, environmental and other factors.

Commission chair Lord Kerslake, the former head of the civil service, warned government that it must “go big or go home” if it is to prevent further economic decline and meet its stated aim of reducing regional divisions

The 2070 Commission is an 18-month independent inquiry into city and regional equalities in the UK, with findings showing London’s productivity growth over the last decade nine times higher than the area covered by the whole of the Northern Powerhouse.

Kerslake, added: “We need to recognise that the price of failing to reverse this decline will far outweigh the cost of investing now in creating greater opportunities.

“Properly investing in levelling-up will come at a cost but so will doing nothing about it.”

Other recommendations in the report include:

  • Infrastructure investment to be increased to at least 3% of GDP per year from the current 1.2% cap;
  • Easing access to private financing for investment outside London region.
  • The creation of new ‘networks of excellence’ in regional research and development outside the ‘Golden Triangle’ of London, Cambridge and Oxford.

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