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Councils and LEPs face £14bn social funding gap after Brexit, Government warned

Councils and LEPs face £14bn social funding gap after Brexit, Government warned

🕔06.Jul 2016

Councils across England and Wales are seeking urgent assurances from the Government that they will continue to receive the £5.3 billion in EU regeneration funding that they have been allocated up to 2020 following the referendum result.

The money is earmarked to to create jobs, build new infrastructure and boost growth across the country but there are no certainties that the EU will meet its commitments in full once Britain begins negotiating to pull out of Europe, the Local Government Association has warned.

Concerns have also been raised about the £8.6 billion of European funding allocated to local enterprise partnerships up to 2020.

The Joseph Rowntree Foundation has called on the Government to ensure it has comprehensive plans in place to boost regional economies once the UK has left the EU.

Helen Barnard, head of analysis at JRF, said:

We urge the government to ensure allocated funding is not lost, but that it also has a long-term plan in place to improve living standards in struggling areas. This means working with town halls, LEPs and businesses to create more and better jobs across the country. Otherwise important initiatives like the Northern Powerhouse risk withering after Brexit.

Brexit must be used to ensure we create an economy where prosperity is shared by all and no area is left behind. This means supporting the Northern Powerhouse and the core cities, but also the overlooked towns beyond them, which often miss out and need to see real improvements over the next few years.

The Greater Birmingham and Solihull LEP is due to receive £205 million in EU cash by 2020. The Black Country LEP has been allocated £142 million, Coventry and Warwickshire LEP £109 million, Stoke on Trent and Staffordshire £130 million, The Marches LEP £91 million, and Worcestershire LEP £55 million.

The Local Government Association, which is holding its annual conference in Bournemouth, has been demanding a seat at the table and guarantees that it will play a leading role in negotiating the UK’s exit from the European Union.

Communities Secretary Greg Clark told the conference that Whitehall cannot be their “default destination”. Mr Clark confirmed that local government will have a seat at the negotiating table to agree the UK’s exit from the European Union.

He tasked chairman of the LGA, Lord Porter, to pull together a team of councillors representing all parties and all parts of the country to “make good use of this seat at the table”.

The response to leaving the European Union has to be a radically expanded role for local government. When we are transferring powers from the EU to Britain I think it is essential that Whitehall is not the default destination for them.

For years we have been urging subsidiarity – the principle that power is held as close to the people as possible – on the European Union.

We now must apply it at home and ask first whether powers and funds can be transferred to local government.

That means that local government must be represented at the negotiating table. I argued successfully for English local government to be part of the negotiations on the terms of our exit.

EU laws impact on many council services that affect people’s day-to-day lives. These range from deciding how rubbish is recycled to improving air quality and protecting people from being served unsafe food when they eat out.

The LGA said councils must play a central role in deciding how to replace these EU laws.

Power over the services which councils deliver cannot simply be transferred from Brussels to Westminster. Instead, taking decisions over how to run these local services closer to where people live is key to improving them and saving money, the LGA said.

The LGA will use its Annual Conference to launch its ‘What next for devolution’ consultation which it hopes will spark a national debate about how we ensure the right powers are devolved to local government and communities.

Lord Porter, LGA Chairman, said:

The vote to leave the EU is the most important decision that the British people have made in generations and will have a big impact on local government and our communities.

Now that the British people have voted to part company with the EU, it is vital that we avoid powers or funding which affect local government getting swallowed up in Whitehall. Over the last year, more powers and funding have been given to local areas. The referendum result and the political uncertainty that has followed must not see that process stall or go backwards.

Councils need to be involved from the outset in deciding how EU laws affecting local services are replaced and given the power to run them the way we think is best for our communities. Local government must have a seat at the negotiating table.

Communities also need assurances from the Government that they will still receive billions of pounds worth of EU funding to create jobs, build infrastructure projects and boost growth. As part of the immediate task to stabilise the national economy, this is essential to avoid the strength of local economies being put at risk.

The rise in reported hate crimes in a few areas since the referendum is a concern for us all. Hate, xenophobia and racism have no place in our communities. Councils have an important role to play in healing any rifts and division following the vote. It is what we do best and we will be working hard to bring our communities back together.

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