William Eichler 15 August 2016

Treasury’s commitment to replace EU funding ‘falls short’, councils warn

Treasury’s commitment to replace EU funding ‘falls short’, councils warn image

Whitehall’s promise to honour EU funding commitments in the event of a Brexit ‘falls well short’, council chiefs say.

Chancellor Philip Hammond announced at the weekend the Treasury would cover all structural and investment fund projects paid for by the EU on the condition the agreements were reached before the Autumn Statement.

However, the Local Government Association (LGA) said the Government’s promise ‘falls well short of the full guarantee we are urging the Government to make.’

Speaking on Saturday, the Chancellor said: ‘We recognise that many organisations across the UK which are in receipt of EU funding, or expect to start receiving funding, want reassurance about the flow of funding they will receive.

‘That is why I am confirming that structural and investment funds projects signed before the Autumn Statement and Horizon research funding granted before we leave the EU will be guaranteed by the Treasury after we leave.’

Lord Porter, chairman of the LGA, welcomed the Government’s commitment but warned it was not enough.

‘As welcome as this commitment is, it falls well short of the full guarantee we are urging the Government to make,’ he said.

‘Local areas need certainty around the future of all of the £5.3bn in EU regeneration funding promised to them by 2020.

‘The continued uncertainty risks damaging local regeneration plans and stalling flagship infrastructure projects, employment and skills schemes and local growth.’

The majority of EU funding agreements are tied up in proposals which are yet to receive government approval, Lord Porter said.

He urged Whitehall to approve these and ensure local areas ‘receive every penny of EU funding they are expecting by the end of the decade’.

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