Brexit: How will the Government fund its commitment to left-behind places?

This week, Theresa May announced a £4 billion per year funding boost for the NHS up to 2023, partly paid for by repatriated EU funding. A debate has begun over whether the net financial impact of leaving the EU will deliver anything approaching the sums being promised.

Less commented on are the policies for which money repatriated from the EU has already been earmarked. One such policy is a new system of investment in economically disadvantaged regions, known as the UK Shared Prosperity Fund.

To deliver on its commitment to create a country that works for everyone, the Government needs to explain how these projects will be financed too. This matters. As the UK prepares for Brexit and decides its future, a fifth of our population are being locked out and left behind by poverty. JRF analysis has shown that where people lived had a direct impact on people’s votes at the 2016 referendum. The Leave campaign flourished in areas with a lower skills and where fewer economic opportunities were available to residents.

In response, Theresa May pledged to lead a radical domestic agenda, promising to create a country in which “no one and no community is left behind”. As part of this programme, the Conservative manifesto identified funds coming back to the UK as a result of leaving the EU for a UK Shared Prosperity Fund. It would replace and improve upon the EU’s system of investments in slower growing regions, which are currently worth £1.2 billion to the UK annually - £2.4 billion once the requirement for match funding from public or private sources is factored in.

In the intervening period, there has been little detail provided about how this commitment will be funded or what the policy will look like. The lack of clarity has sown confusion over how far a successful system of investments in the social and economic fabric of disadvantaged regions will be continued after Brexit. As the table below shows, without this commitment some of the most deprived areas of England stand to lose a considerable amount of funding intended to help them catch up to the national average.

12 areas in England receiving the most funding from ERDF and ESF (2014-2020)

Local Enterprise

Partnership Area

£ per head per year from EU

£ per head per year with match funding

Cornwall and Isles of Scilly

124.1 248.2
Tees Valley 35.2 70.4
North East 32.0 64.1
Cumbria 21.4 42.7
Lancashire 20.9 41.9
The Marches 19.6 39.2
Cheshire & Warrington 18.0 36.0
Black Country 17.6 35.1
Coventry & Warwickshire 17.4 34.9
Greater Manchester 17.4 34.8
Liverpool City Region 16.8 33.7
Stoke on Trent & Staffordshire 16.8 33.6

Source data for table: ONS and BIS.

Two years on from the vote to leave the EU, it is only right we unlock opportunities so more families are not left behind and ensure they can be build a better future. The UK SPF can be a symbol of the Government’s belief in a country that works for everyone, but it can only do so if it is properly funded.

If this week’s announcement means that the Government is earmarking funds from Brexit, it should begin by tackling the root causes that led people to vote for change. This requires the Government to prioritise an agenda that promotes economic prosperity that benefits the whole country and ensures that no region, or section of our society, is left behind.