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APPG sets out case for European funding

The All Party Parliamentary Group for Yorkshire & Northern Lincolnshire met last week with Baroness Hanham, the Government Minister with responsibility for European Regional Development Funds, to ensure that Yorkshire and Humber gets the best possible deal out of the billions of European economic growth funding due to come to the UK from 2014.

The meeting brought together MPs on a cross-Party basis from across the region - including Hilary Benn, John Healey, APPG Co-Chairs Andrew Percy and Barry Sheerman, and Jason McCartney, David Ward, Meg Munn and Paul Blomfield. It was also attended by Timothy Kirkhope, Member of the European Parliament for Yorkshire and Humber, as well a range of local government, college, university, Local Enterprise Partnership (LEPs) and wider business voices from across the region.

Cllr Mehboob Khan, Leader of Kirklees Council and Chair of Local Government Yorkshire and Humber said:

“Local authorities across Yorkshire and Northern Lincolnshire have come together to show their commitment to boost our region’s local economies, and support our communities through promoting growth and helping to create jobs. As locally elected Councillors we know and understand our areas, so are best placed to work with our partners locally and help make the right funding decisions - to not only directly benefit our communities, but also help national Government achieve the economic growth so desperately needed by the country as a whole.

It is vital that we also tackle the bureaucracy that has dogged previous EU funding. By working together locally we can make sure that LEPs, local authorities and our partners in education and the voluntary sector are at the centre of European funding decisions, ensuring that this funding is fully and rapidly exploited for the benefit of our communities and local people.”

The session provided an opportunity to hear of the Government’s latest plans for EU Structural Funds after 2014, which are aimed at rebalancing economic growth and employment prospects. Funding stands to be worth around £6billion across England up to 2020, which Government plans to channel through to local areas via LEPs.

The meeting also provided the region’s MPs and others a valuable opportunity to emphasise that the next round of European Funding needs to address, directly, the specific local economic challenges across Yorkshire and Northern Lincolnshire, rather than be subject to centralised control and targets from Whitehall.

Crucially, the meeting allowed for the case to be presented to the Minister that Yorkshire and Northern Lincolnshire’s current levels of EU funding need the same kind of protections that the UK Government is granting to Scotland, Wales and Northern Ireland.

Despite a reducing EU budget overall, the Devolved Administrations are being granted economic protections by the UK Governnment that mean they will still get at least 95% of the funding they received up to this year. This is serving to reduce the allocation of funding to England – and therefore risks an unfair share for the LEP areas across Yorkshire and Northern Lincolnshire, which could fail to recognise both local economic needs and the huge the growth potential in sectors such as low carbon and renewables.

The fear is that the impact of the proposed allocations to the Devolved Governmets on areas such as South Yorkshire, for example, could equate to a cut of around 50% compared to their existing EU funding programme.

As a result of the economic concerns raised, the Minister agreed to re-examine the broad allocations and likely impacts on Yorkshire and Northern Lincolnshire’s LEP areas again – a move welcomed by the APPG.

Economic protections have been agreed for Scotland, Wales and Northern Ireland – each to get at least 95% of their current funding. This has resulted in a reduced funding allocation for LEP areas in England. However, the APPG heard of a proposition for a similar funding ‘safety net’ for Yorkshire & North Lincolnshire’s LEP areas and the allocations they will receive from the wider England programme. Such a safety net help would ensure protection and retention of a similar level of existing funding, in the same way that the Devolved Administrations are being protected; and guarantee fair allocations that reflect both local economic challenges and potential; as well as the need for Government to deliver on its commitment to rebalance the national economy.

Such protection was seen as especially important for deprived areas and localities with potential for rebalancing economic growth – factors that particularly characterise many parts of Yorkshire and Northern Lincolnshire.

The APPG also agreed on the need for minimal national control and ‘top-slicing’ of funds, with more powers and control being delegated to LEP-level programmes where councils, businesses, colleges and other stakeholders can decide on funding priorities. National Government’s role needs to be one of compliance, with delivery and management resting at the local level; with a further role for Government to work with LEPs and help build their expertise and capacity to deliver.

In April, the UK Government negotiated a real-terms cut in the EU budget (subject to final agreement by EU Parliament). The effect of this deal is due to reduce what the UK will pay by £3.5bn over the next five years.

However, as a result of the new EU formula for allocating Structural Funds, UK Government stated that there would not have been a fair distribution across the UK. Decisions were therefore taken to re-allocate the Structural Funds to minimise the impact of cutbacks in economic growth funding in Northern Ireland, Scotland and Wales. This has had the impact of reducing England’s allocation by €784m, to €6.2bn.

The result is that England will receive 11% less from the UK's allocation than outlined by the EU in February. APPG Members raised a number of questions about the logic of these economic protections for Scotland, Wales and Northern Ireland, at a time when regions such as Yorkshire and Northern Lincolnshire and the wider North of England continue to face significant economic and employment challenges.

For purposes of comparison, Yorkshire and Northern Lincolnshire’s population is 5.2m (and growing faster than the national average) – on a par with the entire population of Scotland (5.3m) and significantly higher than that in Wales (3m) and Northern Ireland (1.8m). Furthermore, for the same size population, Scotland’s economy is significantly stronger – with headline GVA of £108bn (or £21k per person), compared to Yorkshire and Northern Lincolnshire’s £91bn (or £17k per head). Therefore, with an equivalent population but greater local economic growth needs, it would be reasonable to expect at least the same kind of protections for the LEP areas across Yorkshire and Northern Lincolnshire as that granted by the UK Government to Scotland.

The Local Government Association (LGA) nationally has already warned that the distribution in favour of Devolved Administrations risks stalling innovative local projects and the slow-down economic recovery across England, especially where achieving growth is particularly challenging. It is seen as vital, therefore, that the allocations of the Fund across Yorkshire and Northern Lincolnshire do not suffer unduly as a consequence of the proposed UK redistribution.

As a result of the discussion, the Minister agreed to take another look at the framework around the proposed UK allocation of EU funding to the region, and accepted entirely the fundamental need for local leadership of the funds. The APPG will now be formally submitting its asks and recommendations to Government, to ensure that these key issues are followed up by the key decision-makers in Whitehall.

Cllr Derek Bastiman, Deputy Leader at Scarborough Council said:

“This is an opportunity for a new dawn in EU funding for the UK, a whole new Government approach, based on local leadership, which is very much welcomed. Working with and through the LEPs in a co-operative manner, we can target European funding to deliver local benefits and hopefully cut through the red tape which has been a historical hurdle.

This funding will be critical in assisting our region to rebalancing the economy, improve outcomes for local communities and maximise growth opportunities across Yorkshire and Northern Lincolnshire - especially in terms of our unmatched potential in the fields of renewable energy, manufacturing growth and providing the skills and training our communities need to make the most of these opportunities.”

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