Why a vote to leave the EU would stunt local growth
Author: Dominic Leigh |
In a series of blogs in which we consider the compatibility of localism with support for the EU, Dominic Leigh, a Researcher at Localis, makes the case below that Brexit would stunt local growth and therefore be of detriment to local authorities. You can read the opposing argument for voting to leave by Localis’ Ben Ramanauskas here.
Much of the debate surrounding the EU referendum has centred upon the economic benefits of continued access to the Single Market for the country as a whole. However, there has been less focus on the impact of the EU on local authorities and their ability to stimulate growth in their area. Brexit, I believe, could threaten the billions of pounds of funding local areas currently receive from the EU for investment in local projects that support jobs and growth.
Local areas are set to receive £8 billion in EU funding from 2014 to 2020 from European sources such as the European Regional Development Fund and the European Social Fund. This funding has helped local authorities to support jobs and revitalise communities through investment in apprenticeships, infrastructure and local businesses. The EU has been crucial for development in traditionally Labour areas like the North East, which has received EU funding for a host of iconic projects, including the Sage, Millennium Bridge and the Core science centre. But at the same time, the EU has supported small businesses across the country, including in Tory shires like Shropshire and Herefordshire whose EU-backed Business Fund has helped nearly 200 businesses and created over 100 full-time jobs. Indeed since 2007, the European Regional Development Fund alone has, according to the Department for Communities and Local Government, created around 115,000 jobs and helped 25,000 businesses to start or move into local areas in England.
Although the LGA has understandably taken a neutral position on whether Britain remains in or leaves the EU, it has previously said that the EU’s cohesion policy promotes a devolved or localist approach in Member States. Even the most ardent Eurosceptic would surely accept that this EU funding has had a positive impact for local communities and businesses, while also helping to increase the business rates that local councils collect. The million dollar question, or in this case the £8 billion pound question, facing local government is whether, if we left the EU, the UK Government would ensure that any money ‘repatriated’ through Brexit is given back to local areas rather than used for other priorities, such as balancing the Treasury’s books. I’ve looked high and low but I can’t find any pledge from the Leave campaign on this issue. Maybe I’m too cynical, but that makes me suspicious.
Many councillors have already expressed concerns that Central Government would opt to reclaim some or all of this valuable funding, to the detriment of local communities around the country. More than 60 Labour councillors signed a letter in the Times stating that Brexit would “represent a further funding black hole that would make it harder [for councils] to build homes and protect our towns against flooding”. But this is a bipartisan concern, with 40 leading Conservative councillors writing to the Daily Telegraph echoing these sentiments. My question to supporters of localism is: Why would you want to put local authorities’ access to this crucial funding at risk by pulling out of the EU?