It’s well over a year since the Brexit Referendum and we still have little idea on what the future holds for regions such as the South West and West Midlands in terms of replacement EU funding.

The Government has guaranteed to honour EU funded projects up to 2020 that finish after we have exited from Brussels. But what about the bigger picture? European Structural Investment Funding (ESIF) is administered in 7-year cycles with the current UK pot worth some £8.4 billion from 2014 to 2020. What happens to regeneration aid on this scale post-Brexit i.e. after 2020?

The Local Government Association (LGA) has published a discussion document on this issue -“Beyond Brexit: Future of Funding Currently Sourced from the EU” July 2017. The document can be accessed here

The LGA is a cross-party organisation that works on behalf of councils to ensure that local government has a strong, credible voice with national government. It currently has a membership of 415 authorities.

This discussion document presents in-depth analysis into three options, which aim to inform the debate, design and delivery of post-Brexit funding arrangements.

  • Option 1 – No Change. Basically the same regional aid policy with the funding coming from UK government rather than the EU. Funding would remain largely nationally-led managed by various government departments and agencies. Little innovation with a ‘silo’ approach and no improvement on levels of bureaucracy in delivery.
  • Option 2 – Innovative Flexi-Fund. A fundamental re-working of pre-Brexit funding arrangements to a structure that is more innovative and linked to a flexible single pot allocation. A single pot could, for instance, merge the local funding strands of ESF, ERDF, EAFRD and EMFF in order to deliver local integrated programmes bringing together people, places and business. .
  • Option 3 – Fully Integrated. This represents a departure from where we are today to identify and integrate all post-Brexit growth funds and subsidies, including those that sit beyond EU structural funds such as Horizon 2020, LEADER, Erasmus and Interreg. This option promotes fully integrated financial devolution, enabling local authorities to target funding to the needs of people and place.

Given the creation of a Local Enterprise Partnership (LEP) structure, it makes sense to have much more devolved financial authority in the regions, but it must be matched with a shift in mind-set from ‘spending the money’ to ‘value for money’. Some regions in the UK have benefitted from a guaranteed pot of EU funding based on an economic formula. Going forward they will be competing against each other for a share of funding on a value for money basis. Businesses therefore need to get more vocal with their LEPs about what will make the biggest impact to their growth – is it transport infrastructure, workspace, access to finance, grants, loans, skills & training, business advice, rates relief or other? This is just the start of the debate but the louder the voice of business the better.


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