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Yorkshire will lose millions as new ‘prosperity fund’ much lower than EU money it replaces
Yorkshire is set to receive more than £130m from the Government’s post-Brexit ‘shared prosperity fund’, it has been announced.
Levelling Up Secretary Michael Gove has said the cash, which nationally amounts to £2.5bn over the next three years, will “help spread opportunity and level up the country”.
But there are accusations that the North has been short-changed by the fund, which replaces money previously awarded by the European Union.
During its EU membership, the UK received an average of £1.5bn a year in structural funds between 2014-2020 from Brussels.
But the replacement SPF will only be worth around £400m this year, £700m next year and will only hit the previous level of £1.5bn in 2025.
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The Government has argued that it only needs to “match” EU funding levels by 2024-25 because the UK will continue to receive its final allocation of EU money until then.
In all, the fund will see the West Yorkshire Combined Authority receive £68m, the South Yorkshire Combined Authority will get a £38m share, while councils in East Riding, York and Hull will get around £25m.
West Yorkshire Mayor Tracy Brabin slammed the offer, pointing out that under the previous EU model her region would have received £105m.
She said: “The people of West Yorkshire were promised the equivalent of EU support if we left the European Union. Today’s announcement means our communities will be worse-off.
“Government has said that the UK Shared Prosperity Fund is a key part of their efforts to level-up the UK. This funding cut for our region is another decision that yet again undermines levelling up.”
Think tank the Institute for Fiscal Studies said the SPF was a “missed opportunity” and blasted the Department for Levelling Up for following an “arbitrary” formula that favoured regions like Cornwall and the Welsh Valleys, at the expense of the North.
IFS associate director David Phillips said: “Brexit provided an opportunity to rationalise the funding framework, ensuring it used up-to-date estimates of population and socio-economic conditions. It is disappointing that, instead, the UK Government has ‘taken back control’ only to stick to an arbitrary, poorly designed, out-of-date funding allocation mechanism.”
Northern Powerhouse Partnership director Henri Murison warned that some areas could see their funding fall by a third, compared to what would have been on offer if Britain had still been in the EU.
He said: “We can’t escape the fact that this is a huge drop in funding available for economic development. There is no longer an overlap between funding periods, which means less money overall, nor will regions get seven years of certainty as they did with EU structural funds.
“What’s more, places have less freedom to spend funding as they choose and must run spending decisions past Whitehall beforehand. This is a big step backwards and is very far from being real devolution.”
Mr Gove was however bullish in announcing the SPF this morning, he said: “We have taken back control of our money from the EU and we are empowering those who know their communities best to deliver on their priorities. The UK Shared Prosperity Fund will help to unleash the creativity and talent of communities that have for too long been overlooked and undervalued.
“By targeting this funding at areas of the country that need it the most, we will help spread opportunity and level up in every part of the United Kingdom.”
YorkshireLive was told the allocation formula for UK Shared Prosperity Fund takes into account “local population data, and a broadly based measure of need, including factors like unemployment and income levels”.