We have had more than a full calendar year since signing the Brexit divorce papers and too short a time to fully understand the implications of what was bargained for in the deadline-defying trade deal struck on Christmas Eve.
So where the rubber hits the road for post-B word local economies is the quantum of regional funding Whitehall can shift through the channels. In essence, how much moolah can be dispensed where and how quickly. Again, it can’t be stressed enough how different is the scale of all this when compared to the hundreds of billions printed and borrowed by central government to keep the country afloat from the time of the last March Budget to date to cover the emergency.
However, access to this money will be vital for sub-regional growth. So what have we got? At the outset, it is worth remembering, however, that during the Brexit water torture years, ardent champions of departure would argue on the following lines. That since the UK was a net contributor to the EU, putting in twice the amount it clawed back, the UK Shared Prosperity Fund (UKSPF) should, when launched, seek to match levels of EU structural funding as a minimum ask. Plainly, as masters of our destiny, the funding envelope could, and should, be made more bounteous fare.
Well it didn’t quite work out that way in practice for the replacement to the European Structural and Investment Funds (ESIF) for local regeneration – which is to be run jointly by the Ministry of Housing, Communities and Local Government and the Department for Work and Pensions.
Under the terms of the EU-UK Withdrawal Agreement that came into effect last February, we will continue drawing down on ESIF until 2023. From last November’s one-year Spending Review the plan is to at least match receipts from EU structural refunds averaging around £1.5bn per year. To help prepare for the first year in 2021/22, some £220m of additional funding has been made available to help communities pilot programmes and test new approaches.
Further details will be set out in a UK-wide investment framework due for publication this spring with confirmation of multi-year funding profiles slated for the next Spending Review.
Now it might be quibbling to lament that the UKSPF has been out-muscled by the £4bn Levelling Up Fund, one of the highlights from last November’s Spending Review. Does this make a difference?
In his reply to chair of the Commons Ministry of Housing, Communities and Local Government committee (MHCLG) last month, regional growth minister Luke Hall asserted the distinctions between the two funds. UKSPF is all about maximising the Brexit dividend through faster funding delivery, better targeting and alignment with domestic priorities all liberated from the dead hand of EU bureaucracy. Its levelling up mission to create opportunity will be focused in ex-industrial areas, deprived towns and rural and coastal communities and to help people facing labour market barriers.
On the other hand, the Levelling Up fund is designed to reach the other parts and help secure investment in local infrastructure that people and communities will sit up and notice. It aims to consolidate the welter of cross-departmental cash pots to get money into high value local projects including road schemes, bus lanes, rail station upgrades as well as upgrading community infrastructure and town centres, local arts and culture. Spot the difference?
During the Brexit years, we often heard it said that removing ourselves from the supranational and remote entanglements of Brussels would be for naught if returned powers and funds were only to be hoarded in Westminster. Indeed. To learn the lesson from the pandemic, the Brexit fund and new growth pots should operate on the basis that only greater local autonomy and trust can deliver national strategy.
Now is not a time to waste by obsessing on new structures and complex governance arrangements. Let’s instead roll up our sleeves and make full use in our localities of the wealth of good structures, plans and people to drive strong and good place-based growth.
Ideally, beyond setting up big bonanza cash pots, central Government should simplify the path to recovery by devolving responsibility, powers and funding to an appropriate ‘mezzanine’ sub-regional level where decision-making is faster and more effective.
What we are talking about here is local growth vehicles for the delivery of local growth. When setting up the agents and institutions eligible to access both the Shared Prosperity and Levelling Up funds to stimulate economic recovery, the Government should be flexible on delivery vehicles for sub-regional infrastructure projects.
The trade off, naturally, should be that delivery vehicles remain anchored in a democratically-elected and accountable local authority. Provided the will from national Government is there, boosting place prosperity should be as easy as crashing a JCB forklift truck through the feeble obstacle of a Styrofoam wall.
Jonathan Werran is chief executive at Localis
