English Local Enterprise Partnership (LEP) areas face a massive funding blow following the government's decision to share the next wave of European Union (EU) development cash more equally across the United Kingdom, council chiefs have warned.

England's portion of the European Regional Development Fund and European Social Fund could decrease by more than a tenth (11%) €784m, under proposals to reallocate major EU structural funds over the 2014 to 2020.

Coalition plans to equalise funding cuts to 5% of 2007-2013 levels would see Northern Ireland receive €181m more than outlined in the EU budget - a 66% boost.  Scotland would gain a €228m funding injection (40%) and Wales a €375m uplift (22%).

The threatened EU cashpot cutbacks come amid concern Whitehall departments are working to restrict to the low billions the size of the single local growth fund available for LEPs at the next spending round on 26 June.

‘This will be a huge disappointment for English local authorities and their local enterprise partnerships at a time when they have to increasingly rely on EU funds,' said Sir Merrick Cockell, chairman of the Local Government Association.

According to Sir Merrick, the announcement makes it even more important for the government to implement Lord Heseltine's proposals for a ‘single pot' approach to devolved funding and to fully commit to Local Growth Deals.

Steven Howell, senior policy officer at the Localis think tank said: ‘The Government's response to the Heseltine review left plenty of wriggle room – only a ‘significant proportion' of EU funding will be devolved to local areas. Local authorities, via LEPs, have a strong case that they know how to spend local infrastructure cash best. But much like the Single Local Growth Fund, you would need a crystal ball to work out how much they will actually get.'