London growth initiatives could be hit by post-Brexit funding deal, Assembly hears

London growth initiatives could be hit by post-Brexit funding deal, Assembly hears

Anti-London sentiment could threaten EU funding for the capital currently worth more than £664 million. That was the stark message from London Economic Action Partnership (LEAP) board member and small business champion Simon Pitkeathley, as board members and executives were interrogated at a London Assembly plenary session last week.

LEAP is the local enterprise partnership for London, created in 2012 alongside regional counterparts across the UK following the axing of regional development agencies by the coalition government. Chaired by Sadiq Khan, it brings business and London’s local authorities together to promote economic growth and job creation in the capital.

LEAP also oversees the regeneration of the Royal Docks, with a £300 million scheme managed jointly by City Hall and Newham Council, contributing to wider East London regeneration forecast to create 60,000 jobs and 25,000 new homes.

EU funding from the European Social Fund supporting employment initiatives and from the European Regional Development Fund, supporting business, innovation and regeneration, amount to 748.6 million euros to 2020, with match-funding bringing the total to some £1.4 billion, Pitkeathley said. That funding will dry up when the UK leaves the EU. And while the government is guaranteeing funding levels until 2023, future supporting under the proposed UK Shared Prosperity Fund remains uncertain.

“What happens when we get to 2023 is a big concern,” Pitkeathley told Assembly Members. “The indication is that total [national] funding may be the same, but not how it is divided up across regions. And this general attitude towards London is being used to put other interests above ours. We can all do a lot by helping government understand the cost of not getting that funding allocated as it is at the moment. And we all know how the country benefits from London.”

The Shared Prosperity Fund is designed to “reduce inequalities between communities” across the UK. Consultation on arrangements for the fund was originally expected late last year, but is still to be announced.

Current EU funding includes £35 million supporting small businesses developing circular economy initiatives, and £43 million for low carbon projects, alongside employment and skills schemes and a separate 1.4 billion euro investment from the European Investment Bank into Crossrail and cycle lanes.

LEAP is funding 200 projects overall, said Debbie Jackson, lead executive at City Hall for LEAP, with significant capital funds including £70 million under the Mayor’s good growth fund, £200 million promoting skills development for Londoners, and £7.2 million for the London construction academy, addressing skills shortages in an area where a third of the capital’s workforce is from the EU.

Funding announced in the last two weeks includes £100 million growth funding for small and medium businesses and £20 million for local high street and town centre regeneration projects.

Conservative Assembly Members pressed LEAP representatives on transparency and results. “How can we scrutinise without detail,” asked Londonwide member Susan Hall. “Trying to find out where the money is going is like ploughing through treacle,” she said, referring to September 2018 recommendations from the Assembly’s economy committee for improvements to the agency’s website so that programme and project information was included.

Improvements were being made, with a redesigned website expected to be in place over the “next few months”, said Rajesh Agrawal, LEAP deputy chair and Mayor Khan’s deputy for business. Jackson confirmed that all funding was monitored, with outcomes against forecasts reported as projects concluded.

Previously UKIP, now “Brexit Alliance” AM David Kurten continued the Brexit theme, accusing Agrawal of being too negative about the impact on London of leaving the EU and reminding the meeting that more Londoners had voted Leave than had voted for Mayor Khan as their first preference, by 1,513, 232 to 1,148,716. “Brexit is a fantastic opportunity for London,” he said.

“Businesses don’t see Brexit as an opportunity, they see it as a threat,” Agrawal responded. “And leaving without a deal will be the worst outcome. I’ve spoken to thousands of businesses. Not one business that I’ve come across has been excited about Brexit.”

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