EU money which could help nation recover from COVID-19 risks going back to Brussels - LGA

More than £730 million in vital EU cash which could help local communities bounce back from COVID-19 risks going unspent and being sent back to Brussels if the funding is not allocated by the Government before the end of the year, councils warn today.

The Local Government Association said 24 per cent of England’s allocation of the European Social Fund remains unspent.

It is calling on the Government to urgently work with councils and combined authorities to ensure the remaining money – which amounts to more than £730 million – is allocated quickly to support the national recovery from the pandemic.

The fund - which the UK is continuing to participate in until the end of the programme - is used for supporting employment, skills and training.

With unemployment expected to rise and local businesses likely to struggle to get back on their feet, the LGA says investment in employment and skills will be more important than ever in the coming months. It is vital that the remaining funding is used to respond quickly to support people and places where it is most needed.

Councils are also concerned about the ongoing lack of detail around the Government’s proposed UK Shared Prosperity Fund, which will replace EU funding.

The LGA said councils and combined authorities want to work with the Government to co-design the UKSPF, based around local need and the alignment towards a single pot of growth funding.

It is calling on the Government to provide the details and consultation of the UKSPF, to help give communities the long-term funding certainty they need to rebuild and renew their economies following this crisis.

Cllr Kevin Bentley, Chairman of the LGA’s EU Exit Taskforce, said:

“The Government needs to make sure the remainder of this fund reaches the local communities that need it desperately following the devastating economic impact of COVID-19.

“Councils and combined authorities are ready to work with government to make sure that local residents and economies can reap the benefits of this funding.

“As the country looks towards how we bounce back from COVID-19, this funding is more important than ever.

“This is vital money which as it stands risks going unspent and returned to Brussels, when instead it can and should be invested in jobs, skills and training critical to the national recovery.”

Notes to editors

  1. The European Commission has offered greater flexibilities on how the ESIF programme can be spent through the Coronavirus Response Investment Initiative Plus. The CRII+ is a time limited offer of flexibilities for any programme that directly tackles COVID-19.
  2. Calculation of unspent money based on the ESF Performance Report from the Growth Programme Board that 75.91% has been committed which is valued at £2.304 billion. The remaining 24.09% amounts to £731,173,231.5. Over £500 million is in an appraisal process which can take over a year to complete.
  3. The LGA represents more than 330 councils of all types across England. We work on behalf of our members to support, promote and improve local government.
  4. It is councils who had led communities through the COVID-19 crisis. Our recent polling shows that 71 per cent of residents trust their council and two thirds are satisfied with the way their local council runs things in their area. Our new discussion paper - Re-thinking Local - sets out how councils must now be empowered to locally-lead the COVID-19 recovery and tackle the economic, environmental and community challenges that we will face as a result of the pandemic.