Press Story

UK replacement for European Union support funds should give spending powers to local communities, IPPR urges

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.

Today’s IPPR report argues that powers over the 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 says 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 argues 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. Under new measures regions such as the West Midlands and parts of Yorkshire might receive more.
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, 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.”

CONTACT

David Wastell, Head of News and Communications, d.wastell@ippr.org / 07921 403651

Robin Harvey, Digital and Media Officer, r.harvey@ippr.org / 0207 470 6154

NOTES

The report’s co-authors Kate Henry and Marley Morris, Senior Research Fellow at IPPR, are available for interview.
The full report, Regional funding after Brexit: opportunities for the UK’s Shared Prosperity Fund, is available (under embargo) on request.
It will be published online at 00:01 Wednesday 27th February: http://www.ippr.org/research/publications/regional-funding-after-brexit
The report is designed to feed into the government’s forthcoming consultation on the Shared Prosperity Fund. The government previously announced that it would consult on the fund by the end of 2018, but the consultation has been delayed.
This report makes recommendations for devolution of power and funding to combined authorities. In other areas of England, a local authority could also take on such devolved powers.
IPPR did not take a position in the referendum on the UK’s membership of the European Union and the findings of this report are not intended to support either a ‘leave’ or ‘remain’ position.
IPPR is the UK’s pre-eminent progressive think tank. With more than 40 staff in offices in London, Manchester, Newcastle and Edinburgh, it is Britain’s only national think tank with a truly national presence. www.ippr.org