Take back control over post-Brexit funding, says new report

Local areas should be able to decide how to spend the replacement to EU funding after Brexit, according to a new report from leading think tank IPPR.

European structural funding – currently worth around £1.2 billion a year to the UK – is due to be replaced by a ‘Shared Prosperity Fund’ after the UK leaves the EU. But 30 days before the Brexit deadline, the Government is yet to set out how the new fund will work.

In the North East, many businesses, charities and social enterprises have directly benefitted from EU funding. Things like the European Regional Development Fund and the European Social Fund have provided vital support to many of the region’s leading firms.

The IPPR report (released Feb 27) argues that powers over the new funding should be devolved to combined authorities and that residents should have a direct say in how the funds are used.

The UK is highly centralised and its economy is geographically imbalanced. Residents’ panels – made up of a representative sample of the population – could better inform regional spending decisions and give more control to local people, IPPR says.

The report comments that giving local government and communities more powers over the use of regional funds will strengthen local democracy, reduce bureaucracy and improve spending decisions.

It proposes drawing on recently-developed ways to engage with communities. These include Poverty Truth Commissions, which brings together local decision makers and people with direct experience of poverty, and citizens’ juries, which allow communities to deliberate and decide on local issues.

The report also says that the basis on which EU funding is distributed between different regions of the UK should be rethought. Under the current system, funding is targeted on regions with the lowest GDP per head. But IPPR says a more holistic approach is needed.

It recommends that:

• Places with higher levels of poverty and lower incomes, included in a “dashboard” of measures of local need, should receive more funding than under the current system.
• Neighbourhoods and local communities should be allocated at least 20 per cent of the funds to spend on their own priorities, or on developing social infrastructure – such as building community centres and creating green spaces.
• Combined authorities should be encouraged to experiment with new approaches to investing the funds, such as community-owned businesses and cooperatives.

Commenting on the report’s findings and recommendations, its lead author Kate Henry (pictured), said:

“Many regions in the UK have relied on European structural funding to boost local economic growth. After Brexit the Government’s replacement Shared Prosperity Fund will offer an opportunity to redesign the funding and make it more effective, simplify its administration, and bring it closer to local communities.

“The Government should grasp this opportunity to devolve control over the funding to the local level and empower residents to shape how the funds are spent in their own areas.”