A government fund designed to replace EU grants lost to Brexit has been criticized as “nothing more than a disgrace” that would leave Britain’s tens of millions of pounds worse off than when Britain was in the EU.
The Conservatives’ manifesto of 2019 promised “at least” to correspond to the average EU subsidy of around £ 1.5 billion a year to help the most deprived parts of the UK.
But details of the government’s Shared Prosperity Fund show that it will distribute just £ 2.6 billion over the next three years and will not match the previous level of EU funding of £ 1.5 billion a year until 2025.
The agreement has been heavily criticized by think tanks and political leaders, including the Welsh government, which has said it must lose more than £ 1 billion in funding over the next three years.
The IPPR North think tank said the government’s shared prosperity fund was reduced by 43% in real terms compared to the EU’s average annual grant of £ 1.5 billion between 2014 and 2020.
The mayor of South Yorkshire, Dan Jarvis, said he owed the region £ 900 million in funding, which would be in line with what he would have received if the UK had remained in the EU. However, he received just over £ 38 million over three years.
He said: “This message is nothing more than outrage; a cynical conservative con man who completely fails South Yorkshire and drives a coach and horses through the government’s equalization program.
The Equalization Unit insisted on “fulfilling the UK Government’s commitment to match the average spending of EU structural funds” by equalizing the EU’s £ 1.5 billion in 2025. He said the regions would continue to receive funding from The EU by the end of 2024.
However, regional leaders and political experts have accused the government of using “smoke and mirrors”, counting old EU money over the next two years.
The Northern Powerhouse Partnership, chaired by former Conservative Chancellor George Osborne, said regions in the north of England would receive up to 37% less funding from the new government fund than the EU.
In the North East of England, one of the most deprived regions in the United Kingdom, this amounts to a difference of £ 71.3 million over the next three years, the report said.
Serious cuts to regional economic development in the north, with the Shared Prosperity Fund failing to match previous funding, as promised 📉
Liverpool City Region -34% Tees Valley -37% Greater Manchester -35% Cheshire & Warrington -35% Cumbria -36% Lancashire -35% Northeast -37% pic.twitter.com/I0HntqVvAA
– The Northern Powerhouse Partnership (@NP_Partnership) April 14, 2022
Henri Murrison, director of the Northern Powerhouse Partnership, said: “We were promised that no nation would be worse off after Brexit, but when you remove the smoke and the mirrors, the data doesn’t lie.
“These funds have helped young people find work, supported small businesses and supported vital medical research – reducing it will have catastrophic consequences for our economy.
Neil O’Brien, the equalization minister, took to Twitter on Thursday to defend the scheme, insisting that the government “compares in real terms what each place receives on average from [2014-2020] program ”.
However, this includes counting old EU money that is still being delivered to these areas. IPPR North said the government’s promise to meet EU funding was “far from reality” over two of the next three financial years.
He described the message as a “serious balancing act” that will stifle ambitious long-term investments. While EU grants were awarded for seven years, the Shared Prosperity Fund model is only for three years.
Michael Gove, Secretary for Raising Levels, said: “The UK Shared Prosperity Fund will help foster the creativity and talent of communities that have long been neglected and underestimated.
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