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LGA: robust plans needed to replace £8.4bn EU funding shortfall post-Brexit

Councils have once again called on the government to draw up robust plans to replace £8.4bn worth of EU funding available to local authorities that will be lost after Brexit.

In a new report, ‘Beyond Brexit’, the LGA said it is vital for the government to commit to replacing vital EU regeneration funding, that has been instrumental in creating jobs, supporting SMEs and boosting growth in local areas.

The government did propose to make a UK Shared Prosperity Fund to replace the funding in the Conservative manifesto, but the LGA has argued that any successor scheme needs to be at least equivalent value to the current European Structural Investment Funds (ESIF).

This fund had been set to provide local areas with €10.5bn (£8.4bn) funding, cash which obviously will no longer be heading to England following the UK’s decision to leave the EU last year.

Local authority leaders have said that they will work with government to avoid defaulting to a ‘silo-approach’ – saying that any new funding scheme should not be the same as the previous EU programme, which was often bogged down in government bureaucracy.

The LGA also appeared to be optimistic about the opportunities presented by Brexit, adding that it was an “historic opportunity” to give local areas a greater say over how a new regional aid fund can be simplified and better aimed at funding local projects to grow England’s economy.

“Since the referendum, one of the biggest concerns for councils has been the future of vital EU regeneration funding,” said Cllr Kevin Bentley, chairman of the LGA’s Brexit Task and Finish Group. “Councils have used EU funds to help new businesses start up, create thousands of new jobs, roll out broadband and build new roads and bridges.

“Securing a government commitment around this vital regeneration funding has been an important step,” he added. “To further its devolution commitments, we want to work with the government to help develop a fully-funded and locally-driven successor scheme with local government in areas of all types.”

Cllr Bentley added that current EU funding was allocated over a seven-year period, and that this long-term distribution must be maintained to allow for long-term planning.

“Funding must be easier to access and local areas need full control over how it is spent and what projects it is spent on,” he argued.

“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.”

The LGA’s message also follows experts in the Centre for Cities think tank warning last week that affluent cities in the South of England were likely to be hit hardest by the economic effects of Brexit. 

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