City council asks for assurances on £80m pledge after Brexit
Bosses speak to inquiry about replacing EU grant
NEWCASTLE City Council has asked for reassurances about whether the Government will replace £80 million in funding currently provided by the European Union.
The city is due to receive at least £80m of the £420m earmarked for the North East between 2014 and 2020.
EU money has been used to provide loans to employers, allowing them to expand, fund university research and help pay for major building projects.
But it’s unclear whether the funding will continue after Brexit takes place.
Helen Dickinson, speaking to an inquiry in the House of Commons, Newcastle City Council’s assistant chief executive, said: “That funding is really critical to our ability to support our local economies.”
The Government has announced plans to set up a new scheme, called the Shared UK Prosperity Fund, which will replace EU money. But Newcastle City Council said it was not clear whether the same level of funding would come to the North East under the new system.
It pointed out that EU funding goes directly to the regions, while Government funding schemes tend to be controlled by Whitehall. And EU funding is allocated based on “need”, which means it goes to areas such as the North East with relatively poorly-performing economies, based on economic output per person.
In a written submission to the Communities and Local Government Committee, which is holding an inquiry into the impact of Brexit on local authorities, Newcastle said: “We are concerned about the timeline, implications, and attractiveness of local institutions as investment partners if a future fund is not in place by March 2019. If the momentum created by continuous EU, regional and local investment is lost, growth rates and the pace of development may be affected. The risk of a cliff edge effect on the economy and labour market should not be underestimated.”
The paper, and evidence given in
p e r - son by Ms Dickinson, will be used by MPs to produce a report early next year which will be published and submitted to the Government.
It came as the Government’s handling of Brexit came under the spotlight as never before. Brexit Secretary David Davis insisted the UK government had produced no economic forecasts on the impact of Brexit on various sectors of the economy – contradicting previous claims.
Last year he said his department was “in the midst of carrying out about 57 sets of analyses” on different parts of the economy. And in October this year, he told the Brexit committee that Prime Minister Theresa May had read “summary outcomes” of impact assessments, which he said went into “excruciating detail”.
But on Wednesday he told the committee that “no systematic impact assessments” had in fact been carried out. Chancellor Philip Hammond revealed that the Cabinet has not yet Newcastle Civic Centre had a full discussion of what should be the Government’s preferred “end state position” for the UK after Brexit. It suggests the Government doesn’t know what sort of deal it wants.
Mr Hammond told the Commons Treasury Committee: “The Cabinet has had general discussions about our Brexit negotiations, but we haven’t had a specific mandating of an endstate position.
“That is something that will be done first in the sub-committee constituted to deal with this issue, and logically that will happen once we have confirmation that we have reached ‘sufficient progress’ and are going to begin the phase two process with the European Union.”