Beyond Brexit: future of funding currently sourced from the EU

Following the referendum, one of the biggest concerns from councils was addressing the potential €10.5 billion (£8.4 billion) UK-wide funding gap for local government that would immediately open up from the point we officially exited the EU, unless a viable domestic successor to EU regional aid was in place.


Since then, the Local Government Association (LGA) has called for a government commitment to replace vital EU regeneration funding. In its manifesto, the Government pledged to create a UK Shared Prosperity Fund to replace the money local areas currently receive from the European Union.

The LGA has called Brexit provides a historic opportunity to give local areas greater say over how to target regional aid funding at local projects of benefit for local people and economies and best support infrastructure, environment, enterprise and social cohesion.

The discussion document: Beyond Brexit: future of funding currently sourced from the EU presents in-depth analysis of a number of options which aim to inform the design and delivery of the UK Shared Prosperity Fund.

The first part of this report covers the LGA’s work to date; this includes a summary of our basic principles for successor arrangements and an analysis of our independent research into potential funding scenarios.

The second part of the report presents in-depth analysis of three options, which aim to inform the design and delivery of successor arrangements, as follows:

‘Option 1: No change’. This highlights the risk of implementing a domestic regional aid policy which simply mirrors the current ESIF funding programme in terms of structure, value and allocation timescales, but does not take opportunity to innovate.

‘Option 2: Innovative flexi-fund’ - A much welcome step forward which envisages a fundamental re-working of pre-Brexit funding arrangements to a structure that is more innovative and linked to flexible single pot allocation.

‘Option 3: Fully integrated’ - Represents the greatest flexibility in the design of a successor arrangement for regional funding, and would include EU funding and national growth funds into one flexible fund to maximise its potential.

Share your views

The options and analysis presented are intended to kick-start a conversation, and we are keen to receive feedback.

We are particularly interested in hearing about any opportunities and/or risks that are not captured by the analysis and that should be explored—particularly when these are bespoke to local areas.

We would be interested in any initial views by 5 September 2017.

All information can be submitted to brexit@local.gov.uk