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Gov says Shared Prosperity Fund will target productivity

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The government has refused to clarify whether the UK Shared Prosperity Fund, which will replace the funding that the UK gets from the EU after Brexit, would match or exceed the equivalent levels of EU funding.

The Commons housing, communities and local government committee’s report on Brexit and Local Government called for the government to confirm that the fund would “match or exceed the equivalent levels of EU funding”. However, in it’s response today, the government has shied away from this, saying “final decisions are due to be made following the spending review.”

Instead, the response confirms a financial guarantee on European Structural Fund projects agreed before the UK leaves the EU, which it says provides organisations with certainty of payments up to 2023.

The government says the shared prosperity fund would “invest in the foundations of productivity as set out in our modern industrial strategy to support people to benefit from economic prosperity, especially in those parts of the UK whose economies are furthest behind”.

The response said that simplified administration for the fund will ensure that investments are “targeted effectively to align with the challenges faced by places across the UK, and supported by strong evidence about what works at a local level”. 

Committee chair Clive Betts (Lab) said the response was “very supportive in general” but “lacking in detail”. “We don’t know what the shared prosperity fund will look like, how much will be in it and whether local authorities will be guaranteed as much money as they had been by the EU,” he said. ”And there is no devolution framework, which I had assumed would be the basis for the transfer of powers. The government is on the right lines, but there is much still to do.”

Mr Betts pondered that the lack of clarity from the government around the issue of devolution and the shared prosperity fund could be down to ”waiting for a new leader to take the reigns”, and “ongoing lack of certainty over Brexit”. “The lack of detail is replicated in other areas like social care, where we are still waiting for clarity,” he added.

The government says that in addition to the £58m given to councils to prepare for Brexit, it is committed to setting up a ‘New Burdens Doctrine’ to provide local government with the appropriate funding in full, ”should a new Brexit burden be identified and assessed”.

MHCLG is leading an “extensive and transparent” programme of work with other governmental departments and the local government sector to identify and assess new burdens, the response says.

Progress has been made in identifying new burdens relating to the extra costs to councils of applying to the EU Settlement Scheme on behalf of children for whom they have parental responsibility, and for supporting applications for those for whom they have shared parental responsibility.

As a result of the new burdens assessments, the government says that it is providing training for the replacement to the EU’s TRACES (Trade control and expert) system. It is also working with Trading Standards to support enforcement of food labelling regulations and ensuring enough supply of authorised signatories for Export Health Certificates by designing it at a cost recoverable function.

Lawyers in Local Government (LLG) had called for councils to receive new burdens funding to cope with additional Brexit-related costs back in March.

LLG President Phillip Horsfield told LGC today that without more detail, it is too early to tell whether the £58m so far allocated will be enough. “It is however imperative that local authorities are properly funded to ride this tide of instability”, he added. He also pressed the government to ensure that the pledged £58m is administered in a “fair and equitable way”, “acknowledging the extent of regional economic shock felt, and recognising within the burden, the potential increase in vulnerable persons and demand on local authority services”.

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