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15.08.16

Lord Porter: EU funding pledge ‘falls well short’ of allaying local uncertainty

The government’s decision to honour existing projects reliant on EU funding and those signed-off by the Autumn Statement is a welcome move but “falls well short” of the full guarantees local authorities need, Lord Porter, chairman of the LGA has stated.

Over the weekend, the chancellor, Philip Hammond, announced that EU funding for farmers, scientists and other projects will be replaced by the Treasury after Brexit. This is a move which could cost up to £6bn a year.

However, Lord Porter said it falls short of the guarantee the LGA is urging the government to make. Since the vote to leave the EU, the LGA has been calling on the government to give local authorities the reassurance that they will still receive the extensive funding they have been promised from the European Union.

“Local areas need certainty around the future of all of the £5.3bn in EU regeneration funding promised to them by 2020,” he added. “The continued uncertainty risks damaging local regeneration plans and stalling flagship infrastructure projects, employment and skills schemes and local growth.”

The chancellor said he wanted to reassure many organisations in the UK in receipt – or expecting to be in receipt – of EU funding.

“That is why I am confirming that structural and investment funds projects signed before the Autumn Statement and Horizon research funding granted before we leave the EU will be guaranteed by the Treasury after we leave,” he said.

“The government will also match the current level of agricultural funding until 2020, providing certainty to our agricultural community, which play a vital role in our country.”

The Chief Secretary to the Treasury, David Gauke, has also written to each devolved administration to confirm the same level of assurances offered to UK government departments in relation to programmes they administer but for which they are expected to rely on EU funding.

It was noted that the Treasury will work closely with the devolved administrations on subsequent funding arrangements to allow them to prioritise projects within their devolved responsibilities. Last week, Scotland’s first minister injected another £100m into this year’s funding in order to motivate the economy.

But Lord Porter said the vast majority of EU regeneration funding remains tied up in thousands of proposals which are yet to receive government approval.

“For example, Cornwall and the North-east have both only received 20% of their EU funding allocations so far and Birmingham has only received 25%,” he said.

“Between now and the Autumn Statement, the government must pull out all the stops in working with local areas to get the hundreds of projects currently in development and at the cusp of funding agreements over the finishing line.

“The government must also use the Autumn Statement to guarantee that local areas will receive every penny of EU funding they are expecting by the end of the decade, as well as honouring commitments to match fund EU monies with domestic funding.”

The peer added that areas in England are “desperate” to get on with the job of creating jobs, building infrastructure and boosting growth.

“With national funding for regeneration increasingly being depleted, all local areas have looked towards EU money,” he said. “Securing the future of this vital regeneration funding is central to this and key to achieving the government's ambition of an economy that works for all.”

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