Len Duvall: What will happen if London’s EU funding disappears?

Len Duvall: What will happen if London’s EU funding disappears?

Brexit is – allegedly – just four months away and yet the future for those services which rely on Europen Union funds in London is as opaque as ever. The public sector, businesses and the further and higher education sectors have been left with no firm, quantified assurances of their funding future. That there continues to be an absence of guarantees on the regulatory frameworks for finance, migration, workers, services and goods only serves to intensify the general atmosphere of uncertainty that prevails across the economy and our society.

Brexit, in its current hard or no deal form, represents a considerable risk to the future of infrastructure investment. With the green investment bank was privatised and public works loan board staggering on three years after its abolition was announced, the European Investment Bank (EiB) is more important than ever before – and is often one of the best value options around. From the retro-fitting of homes to boost energy efficiency, to Crossrail and the Docklands Light Railway, London will benefit from EiB money for years to come. What certainty can we have of access to funding in the future?

Take, for instance, the LEAP – London’s local enterprise partnership. For the European structural investment Fund (ESIF) 2014-2020 funding round, the LEAP will have received £581 million in EU funds. This money is then allocated to an array of worthy and important projects, ranging from £4 million to support start-ups in London libraries to £86 million to support energy efficiency and small-scale renewable power generation. These sorts of projects – often small-scale, sometimes unglamorous – provide real opportunities for work, learning and good growth in our communities. It’s unconscionable that their future is now plunged into doubt.

The government’s planned replacement for the ESIF – the UK shared prosperity fund (UKSPF) – will plug some of the gap, but it remains mired in a lack of clarity regarding priorities, regional allocation or distribution methods. To reiterate – Brexit is just four months away.

While the British government dithers over its own fund, the EU is already busy preparing its new generation of post-2020 funding programmes. The contrast could hardly be starker. While the UK would retain access to the ESIF and other programmes until the end of the current funding period under a “deal” scenario, a no-deal scenario would leave us outside the scheme, and the government woefully ill-prepared to deal with the consequences.

Worries also persist on the issues of localism and democratic accountability. While the government likes to talk a big talk when it comes to devolution, the reality – for those of us at City Hall, and across the country – is decidedly different. Unlike the ESIF, the UKSPF will be managed centrally, rather than the funds being directly devolved to the Greater London Authority. Can the government really be trusted to give the capital a fair deal?

Higher education – such a significant part of London’s economy and international appeal – is another area of concern when it comes to the loss of funding. Though the government has committed to covering lost funds for what remains of the Horizon 2020 funding period, there are no guarantees beyond that. Indeed, many EU collaborators are already going cold on undertaking projects with UK institutions purely on the basis of future funding uncertainty. Compounded by the reliance of the sector on an international workforce, one of London’s big economic and cultural success stories of recent years has been pushed into a period of unprecedented doubt.

It’s not just our universities that will suffer, either. Virtually every further education college in London is a recipient of European social fund money. The FE sector – already desperately underfunded after years of austerity and mismanagement – is simply not in a position to absorb further cuts and instability. A sector very much on the frontline of education in our communities deserves far better.

It’s important also to remember that EU funds don’t always exist in isolation – often they’re allocated on a fund-matching basis, with agencies as wide ranging as the Big Lottery Fund, the GLA, national government departments and private sector organisations pitching in. The London green fund, for instance, was allocated €71 million through the ESIF, but ended up leveraging an incredible €480 million, with contributions from other grant providers, pension funds and private individuals too.

Ultimately, all this comes down to political choices. Will the government replace and match these crucial funds, post-Brexit? Will it give local communities and regional government a say over how and where they’re spent? Will they recognise the central role that London plays in our economy, rather than salami-slicing a regional fund and letting the capital lose out? Or will they just sit on their hands, encumbered by an ideological opposition to intervention at all costs?

Faced with a government whose laissez-faire, inactive approach leaves much of our economy and society with nowhere to turn for support, EU funds are a lifeline. As ever, smart government and an active industrial strategy – delivered in partnership by City Hall and the EU – help so many good and important projects get off the ground and thrive. We need guarantees and we need this good work to continue – here in London, managed by London, to the benefit of us all.

Len Duvall is London Assembly Member for Greenwich & Woolwich, leader of the Assembly’s Labour Group and deputy chair of its budget and performance committee

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