Will the UK replace EU regional funding after brexit?
When the UK leaves the EU, it will have to plan for the loss of EU cohesion funds. But how much will this be? And is the UK government planning to replace this spending?
According to a new report, the government will need to spend £1.8 billion a year on the poorest areas in the UK if it’s going to fully replace the Shared Prosperity fund introduced by the EU to target the poorest regions in Europe and provide additional spending.
The report also points out that, if the UK is to replace the European Regional Development Fund and European Social Fund, it will need to spend €10.3 billion in a six year period.
Wales and Scotland have seen the most benefits from the EU Structural Funds. Wales was given €2.4 billion in the 2014-2020 budget, while Scotland received around €900 million
Plus, it will need to provide funding for the Maritime and Fisheries Fund, Youth Employment Initiative and rural development.
On the other hand, the report argues that “the menu of activities on which EU funds can be spent has become too restrictive and the creation of the Shared Prosperity Fund allows a fresh start” and could offer “greater flexibility in spending in order to tackle a wider range of regeneration issues than those presently addressed by EU funding”.
For now, the UK will continue making payments to the EU budget. Once the eleven month transition period is over on 31st December, it will no longer make these payments and poorer regions of the UK will no longer be received from the EU.
The question is, though, will the UK replace this money.
In 2017, Theresa May said that a replacement fund would be created. But she added that “Nearly everything about the Fund is still to be worked out.”
Boris Johnson has set out some of the government’s post-Brexit plans, but so far it’s not clear if similar projects will be funded. Cohesion Funding is a flagship EU policy and if the UK wants to continue supporting these regions, it will need to create its own version by the end of the year.