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European funding protected in event of no Brexit deal

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Projects funded by European money will be guaranteed until the end of 2020 should Britain fail to secure a Brexit deal, the government has announced.

Principles around the UK shared prosperity fund (UKSPF), a pot which will replace the European Union’s structural and investment funds, have also been outlined although there is concern about the lack of detail about its overall size and how funding will be distributed.

Meanwhile, the North East, Tees Valley, West of England, Leicester & Leicestershire, Cheshire & Warrington, and Heart of the South West areas have been chosen to develop the next wave of local industrial strategies. These will be in place by early 2020.

In a written ministerial statement, published on Tuesday, housing and communities secretary James Brokenshire said there was “an extension” to the government’s “guarantee” that projects will receive European funds agreed before Britain leaves the EU.

“The government has today announced an extension to this guarantee, which will underwrite the UK’s allocation for structural and investment fund projects under this EU Budget period to 2020 in the event of no-deal,” said Mr Brokenshire. “This ensures that UK organisations, such as charities, businesses and universities, will continue to receive funding over a project’s lifetime if they successfully bid into EU-funded programmes before December 2020.”

Kevin Bentley (Con), chair of the Local Government Association’s Brexit taskforce, said: “The announcement by the Treasury that, in an event of a no deal, the government would cover European structural and investment funds until 2020 is a positive step and provides greater certainty that there will be no gap between EU funding streams and any domestic replacements.

“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.

“However if the government wants to ensure we have an economy fit for the future, they must act immediately to consult on the detail of what the UKSPF will look like when it replaces current funding. 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.”

Mr Brokenshire’s statement said the UKSPF “will tackle inequalities between communities by raising productivity, especially in those parts of our country whose economies are furthest behind”.

The fund will also be “simplified” with an indication allocations will be based on the contents of each area’s local industrial strategy as these will highlight the long-term “opportunities and challenges” for places. “This prioritisation will help local areas decide on their approach to maximising the long-term impact of the UKSPF once details of its operation and priorities are announced following the Spending Review,” Mr Brokenshire’s statement said.

A consultation on the UKSPF will take place “this year”, he added.

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