Within England, the Government allocated the ERDF* and ESF** funding amounting to € 6.51 billion *** to the 39 Local Enterprise Partnerships (LEPs) in 2014.If the UK leaves without a withdrawal agreement, the Government has committed to replace outstanding EU funding for the duration of the project. With the Brexit deadline now extended to 31 October but with No-Deal Brexit still being a possibility, there is still significant risk and some areas could lose out on funding under a no-deal scenario. 

This would change the local socio-economic ambitions possible in any LEP irrespective of at which receiving end of the wide funding spectrum they are.

  • The bar chart above shows that Cornwall and the Isles of Scilly receive the highest amount of ERDF and ESF funding per capita at €1047.5. 
  • The next highest is in Tees Valley, although this is considerably lower at €299.9 per capita. 
  • The lowest funding per capita of all LEP areas is in the Buckinghamshire Thames Valley LEP, at just €25.8 per person.

The scatter chart below shows the correlation between funding per capita and the proportion of people who voted leave in the EU referendum. This shows a moderate correlation between the two factors. 

We have also correlated funding per capita against our Brexit Vulnerabilty Index, which identifies those places most exposed to the highest risk of adverse economic impacts as a result of Brexit.

This highlights a significant number of areas that paradoxically receive the highest levels of EU funding, demonstrate the lowest levels of economic resilience and also demonstrate the strongest Brexit sentiments. These areas include Tees Valley, Stoke and Staffordshire, Greater Lincolnshire, Derby and Nottinghamshire.

The allocation of European Structural Investment Funds (ESIF) has historically been determined by a range of policy objectives, which has led to wide variations from region to region.

For as long as the UK remains part of the EU, including any transition period agreed as part of a Brexit deal, it will participate in EU-funded programmes as a member state.

In the event of a “no deal” outcome to Brexit negotiations, the UK Government has committed to guarantee funding for EU projects agreed prior to the date of Brexit, in effect protecting funding up until conclusion of the current programme in 2020. 

Details are still scarce around the proposed domestic EU funding successor – the “UK Shared Prosperity Fund” – with no real clarity on the amount of funding to be provided and how it will be allocated. Economic development necessarily requires a long-term focus, so short-term instability and uncertainty are likely to be unhelpful for local leaders, whilst the longer term picture is unknown.

Whilst, Brexit potentially brings the opportunity to reconsider trading relationships with the wider world and for local leaders to present their areas to a global marketplace of talent and investment, robust place based transition plans will be required in the event the longer term structural funding outlook be one that is significantly reduced.

To find out more about our research and data analysis tools or to pose a research question, speak to us at insightstudio@uk.gt.com

In the light of Brexit, our Brexit Vulnerability Index assesses the different factors that are most likely to affect a place's ability to adapt to a post-Brexit world. If you want to find out more about the Vulnerability Index, its underlying socio-economic measures and the places we identified as being most vulnerable, have a read hereIn a  previous analysis we have also identified a relatively strong negative correlation between the proportion of residents who voted leave in the EU referendum and the Vibrancy of the areas, as measured by our VE index score, read more bout it here

Place Analytics is an online platform that provides organisations with deep and rapid insight into the performance of individual places and the levers that fundamentally affect it. Through its intuitive user interface and suite of visualisations, benchmarking tools and proprietary algorithms, it transforms data into a clear ‘story of place’ that can be used to underpin strategy and planning with a robust analytical evidence base.

We also work with a wide range of organisations across the public and private sectors to support Brexit preparedness and contingency planning in those times of uncertainty and to enable the capitalisation on opportunities through our Brexit Room services

*LEPS: Local Enterprise Partnerships are voluntary partnerships between local authorities and businesses in England, set up in 2011 by the Department for Business, Innovation and Skills to support local economic growth and job creations and define area-specific economic priorities.

*ERDF - European Regional Development Fund **ESF - European Social Fund ***The total EU funding allocated to LEPs amounts to € 6,512,800,000