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Regional aid in danger of running out without post-Brexit replacement

Words: Huw Morris
Brexit | Shutterstock: 338831222

Up to £5.3 billion in regional aid funding will run out in 18 months unless the government acts quickly and puts replacement arrangements in place for when the UK leaves the EU.

The Local Government Association (LGA) is calling on the ministers to set out a firm plan to replace the European Structural and Investment Fund (ESIF) 2014-2020 programme when it comes to an end in December next year.  

The ESIF is currently earmarked for local areas to create jobs, support small and medium businesses, deliver skills training, develop rural economies, invest in critical transport and digital infrastructure and boost inclusive growth across the country.

The LGA says the investment acts as match funding to get vital local projects off the ground. With severe cuts in national funding, ESIF funding is a lifeline for local areas to make the investments that really make a difference to people and communities.  

In July 2018, the government announced that it would consult on its domestic replacement, the UK Shared Prosperity Fund (UKSPF), by the end of that year – but this has still not happened. 

The LGA says that continuing delays and uncertainty on the detail of UKSPF is a huge concern for councils and communities that are set to face a £5.3 billion funding gap once the UK leaves the ESIF programme.

“The clock is ticking for the government to set out a firm plan to replace this funding into the next decade and beyond,” said LGA Brexit Taskforce chairman Kevin Bentley. “Brexit cannot leave local areas facing huge financial uncertainty as a result of lost regional aid funding.”

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