The UK’s replacement for EU funding for communities and charities should be worth £4bn a year if all previous funding commitments are matched and then increased according to inflation and social changes, a new report has said.
The report by the Industrial Communities Alliance, which represents 60 local councils across Britain, on the UK Shared Prosperity Fund, which is due to replace EU funding in the UK at the end of the year, says current EU funding to the UK is worth £1.3bn a year.
This £1.3bn includes money awarded by the EU under the European Social Fund, European Regional Development Fund and other smaller funds.
But once inflation and changes in the nation that have taken place since 2014 – the last time the EU budget was set – are taken into account, the UK will need £1.8bn to replace the current level of funding, the report says.
The report also notes that three regions – Lincolnshire, South Yorkshire, and Tees Valley and Durham- have joined West Wales and the Valleys and Cornwall in being eligible for larger volumes of EU funding.
If the Local Growth Fund – which supports investment in skills, housing and transport – is added to the UKSPF, the report says, this would add a further £2.25bn a year to the fund once adjusted for inflation.
This would mean the UKSPF should be worth £4bn a year if all the current funding streams are incorporated into the fund and replaced adequately taking into account inflation rates.
Charities currently receive about £500m in EU funding, which would need to be replaced under the UKSPF.
Charities and umbrella bodies have repeatedly called on the government to confirm that equivalent funding would be available for the sector under the UKSPF compared with the existing EU model.
The Conservatives promised in their manifesto to use £500m in UKSPF funding to help disadvantaged people, but details on the fund, which were due last year, are yet to be announced.
The fund would need to be in place by 1 January 2021 to avoid uncertainty, the report says, and would need to have “multi-annual financial allocations of the longest practicable duration”.
Scottish, Welsh and Northern Irish funds should all be adjusted for inflation and rolled into the UKSPF, the report says.
The report also calls for local authorities to play a greater role in allocating UKSPF funding.