North unites to demand control over EU cash to rebalance the economy

The North’s metro mayors, business leaders and civil society leaders have joined forces to demand control over funding needed to rebalance the economy.

In a cross-party call, the Mayors of Greater Manchester, Liverpool City Region, Tees Valley and Sheffield City Region, alongside the NP11 Board, representing the North’s 11 local enterprise partnerships, the Northern Powerhouse Partnership, the voice of business in the North and the People’s Powerhouse, a grassroots movement, say the Government must fully fund and devolve the Shared Prosperity Fund (SPF).

They are calling for control over the money, which will be repatriated from the EU after Brexit, so they can use it to drive up living standards in their areas.

In its 2017 manifesto, the Conservative party promised to deliver a UK Shared Prosperity Fund with money repatriated from the EU to support towns and cities. The money – known as EU Structural Funds - has been committed until 2020 and is worth £2.4 billion a year in EU and national match funding. 

The Government promised a consultation on its replacement earlier this year. In July, a written ministerial statement said this would be launched ‘later this year’, with details of its operation and priorities due in next year’s Spending Review. But the Government has been urged to ensure its funding is guaranteed ahead of this and the SPF implemented quickly to create more and better jobs.

The urgency is underlined by our new analysis, which shows how some towns and cities have fallen further behind the rest of the country on employment and pay for the least well-off. Nationally the UK has record employment, but some towns and cities are locked out of this success, according to JRF’s new report.

In a joint article, Andy Burnham, Steve Rotheram, Ben Houchen and Dan Jarvis, said:

“More than two years since the Brexit referendum, the defining mantra of that campaign – to take back control – looms large as we approach March 2019.  If that phrase is to mean anything, it must mean substantial devolution of power and resources out of Westminster to the English regions.

“The UK’s employment rate has recently hit record highs and many of our city centres are thriving hubs of commerce and culture. But some places remain locked out of this success story.

“This underlines the need for areas to be given more control of the tools to unlock inclusive economic growth in their communities. Ministers have promised a consultation on the Shared Prosperity Fund this year and this is becoming urgent if we are not to be left with a damaging gap between the ending of EU Structural Funds and the setting up of the Shared Prosperity Fund – a gap which would lead to the closure of vital economic programmes and investments.”

Ben Houchen, Mayor of Tees Valley, said: “What I don’t want is another Whitehall power grab. Post Brexit, we need to ensure that EU funding comes directly back to Metro Mayors so we can direct investment most effectively to meet the needs of local people and local businesses. The needs of places like Middlesbrough and Hartlepool, with lower pay and stubborn unemployment rates, need to be front and centre of any new fund to support economic growth. If the people of the Tees Valley can’t fill the jobs which we create the places they live won’t benefit – then the full benefits of economic resurgence will be lost to those who most need them.”

Liverpool City Region Mayor, Steve Rotheram, said: “The seeds of Brexit were sown as much in Westminster and Whitehall, as they were in Strasbourg and Brussels. It’s vital therefore that the Shared Prosperity Fund is not held in Whitehall, but devolved to Metro Mayors so that we can drive investment to create good quality local jobs and help grow local businesses.”

Dan Jarvis, Mayor of the Sheffield City Region, said: “As we get set to leave the European Union in March next year, it is critical that the Government reaffirm their commitment to devolution by giving elected Mayors control of a fair share of the money that used to be sent to Brussels.”

Roger Marsh OBE, Chair of the NP11 and Leeds City Region Enterprise Partnership, said: “The creation of the UK Shared Prosperity Fund is an opportunity to create a funding mechanism that supports and accelerates the work already underway to create faster growth which benefits our regions and the UK as a whole. We want to work with the Government to ensure the Fund is designed in a way that supports locally-determined plans and priorities, is straightforward to administer and is in place to ensure a smooth transition from European funding.”

Director of the Northern Powerhouse Partnership Henri Murison said: “Of the ten areas in the country with the lowest wages and highest unemployment, four are in the Northern Powerhouse; Blackburn, Liverpool, Middlesbrough and Rochdale. It’s four too many, but there is huge potential for these left behind places in industries such as advanced manufacturing or digitalisation. The investment currently made by our Metro Mayors and Local Enterprise Partnerships in the Northern Powerhouse is significant, and its loss would have a devastating impact.

“If this investment across the country was targeted it would greatly benefit the areas in most need. The Northern Powerhouse is nothing without the talent of its workers, and as we grow the economy creating opportunities for those out of work is vital. Alongside businesses investing in creating new, higher-skilled jobs, we need to ensure those living in towns and communities which have been great in the North’s glorious past can play their part in it being even greater in the future.”

Tracy Fishwick, Director of the People's Powerhouse movement, said: "It is important this funding is devolved to the North and it continues to support, as it does now, development at a community and grassroots level. What can't happen is that areas of the North that have relied on EU funding for many years find that is taken from them - especially as the funding has been helping support Northern communities where austerity measures have hit hardest. It's vital there is the understanding of what is needed on the ground and that can't happen from Westminster - it means genuine involvement from local grass roots organisations and listening to what local people say."

Claire Ainsley, executive director of the independent Joseph Rowntree Foundation (JRF), said:

“As a society, we believe everyone should be able to reach a decent standard of living, no matter where they live. But far too many families and places are being locked out and left behind. In response to the discontent expressed in the EU referendum vote, the Prime Minister promised to build a country that works for everyone. The Shared Prosperity Fund would help deliver on this commitment.

“But families cannot afford to wait until the Spending Review, as many see their prospects deteriorating in towns and cities where jobs and wages for the worst-off are falling further behind the rest of the country. 10 years on from the financial crisis, this underlines why we need to rebalance our lopsided our economy. As we leave the EU, we have an opportunity to change how our economy works and offer a new deal that delivers good jobs and higher earnings across the country.”

JRF recommends the SPF:

  • Should at least match the £2.4 billion a year that currently flows to communities across the UK as a result of EU Structural Funds. It must be additional to existing local growth funding and provide certainty for investment by using long-term funding cycles.
  • The fund should be allocated on the basis of need and targeted according to the economic measures that matter for people’s living standards – the employment rate and earnings of the least-well – and devolved to Scotland, Wales, Northern Ireland, and parts of England with strong governance arrangements.
  • To promote inclusive growth and enable places to respond flexibly to local priorities, the fund should operate as a ‘single pot’, enabling capital and revenue streams to be co-ordinated, so that investments in enterprise, economic growth and good jobs can be combined with programmes to ensure that people on a low income are connected to new opportunities.