LGA: "Clock ticking" on post-brexit funding certainty

Local areas must be given post-Brexit regional aid funding allocations by the time the UK formally leaves the European Union in March 2019, council leaders say today, as they set out an urgent timetable for government to follow to clarify the future of this vital funding.

The Local Government Association said uncertainty around the future of funding into the next decade risks damaging job creation, employment support and business development. Any financial loss if funding is stopped, paused or of less value, would have a significant impact on businesses, employment and skills.

Communities will continue to benefit from EU regeneration funds until the end of the current programmes in 2020. The Government has pledged to create a UK Shared Prosperity Fund (UKSPF) after Brexit to replace the regional aid funding local areas currently receive from the EU from 2021 onwards.

Little detail has been shared on what the UKSPF will look like and the Government has only committed to hold a consultation by the end of 2018. Council leaders are warning that this provides insufficient time for local areas to design and deliver new UKSPF funded schemes and therefore need government to begin working with local areas immediately if vital funding is to be protected.

In a new LGA report on the top Brexit issues for councils, published at its annual conference in Birmingham, the LGA is setting out a timetable of action for the Government to end the growing uncertainty. It includes a call for the Government to have completed a consultation and engagement exercise with all local areas on the UKSPF by autumn 2018 and UKSPF allocations for 2021-2028 announced for each local area by Spring 2019.

The LGA, which represents 370 councils in England and Wales, is also calling for a firm commitment from the Government that EU funding to local areas is fully replaced from 2021.

Local areas will need £8.4 billion of EU regional funding replaced after Brexit. This money has been vital to create jobs, support small and medium enterprises, deliver skills, and boost local growth across the country, in all types of areas. 

Examples include: 

• Greater Manchester has benefitted from a partially devolved EU funding programme that has brought in £322 million to the local area, drawing in additional match funding from public (£240 million) and private investment (£70 million).

• Leicester and Leicestershire have been allocated €134.5 million as well as obtaining the same in match funding and are using their funding to support 6,000 businesses including 1,000 new businesses. This will help create 2,300 new jobs and provide 31,000 people with skills development and employment support.

• Norfolk and Suffolk, through the New Anglia Local Enterprise Partnership, were allocated £86 million to deliver support to an estimated 2,000 existing and new businesses, create 1,000 new jobs, support nearly 30,000 people with skills development and employability and support 2,500 young people into education, employment or training. 

• Numerous multi-million pound investments into Cornwall, backed by significant private investment on top, have helped introduce superfast and ultrafast broadband, which will increase connectivity for 1,200 businesses as well as the local population, develop an Aerohub Business Park and a research and development innovation project aimed at increasing the supply chain cluster in the Space and Aerospace sectors.

Cllr Kevin Bentley, Chairman of the LGA’s Brexit Taskforce, said:

“Brexit cannot leave local areas facing huge financial uncertainty as 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.

“The clock is ticking for the Government to set out a firm plan to replace this funding into the next decade and beyond.

“We want to urgently work with the Government to help develop a fully-funded and locally-driven successor scheme. With national funding for regeneration increasingly being depleted, all local areas have become increasingly reliant on EU money and local areas are desperate to get on with creating jobs, building infrastructure and boosting growth.

“To help ensure we have an economy fit for the future, we urge the Government to act urgently to consult on the detail of what the fund will look like. Councils need to know quickly how they will be able to bid, receive guarantees that the UKSPF will at least match the funding from the current European Structural Fund and receive their funding allocations by the time we leave the EU.

“Without action there is a risk that billions of pounds of investment into our communities will be lost and local areas and economies will be denied desperately-needed funding.” 

NOTES TO EDITORS

1.    There was a diversity of views among local government about Britain's membership of the EU. To reflect this, the LGA remained neutral during and since the referendum campaign.

2.    At its Annual Conference in Birmingham this week, the LGA has published a series of papers aimed at helping build the case for long-term, sustained investment in local government, ahead of next year’s Spending Review. The papers – covering housing, planning and homelessness, funding, improving schools, Brexit, the future of non-metropolitan England, and adult social care – also set out the positive outcomes for the country of investing in local government. You can read them here.

3.    The LGA has set out a timetable for the Government to introduce its UK Shared Prosperity Fund.

• By autumn 2018:

A full government consultation and engagement exercise with all local areas to have been completed. This should create a robust evidence base to inform the timetable, design and commissioning processes for UKSPF.

• By the end of 2018:

The Government should publish a formal response to the consultations.

• Spring 2019: 

The Government should announce UKSPF allocations for 2021-2028 funding for each area. This should be shaped to meet local economic needs and of the same quantum as previous funding programmes.

• Spring/Summer 2019: 

Local areas can begin developing a local bidding and match funding process to allocate their UKSPF allocations.

• December 2019:

End of funding bidding process.

• January 2020: 

Local areas have programme management processes in place and can commence commissioning of programmes.

• September 2020: 

Contracts are in place to deliver UKSPF projects from 1 January 2021.

• December 2020:

End of EU funding.

• January 2021:

UKSPF projects commence.