In my constituency, London, there’s a remarkable project that delivers basic skills training to 21,000 unemployed people. It has a budget of more than £13m to help them to overcome the barriers keeping them from work – whether that be health problems, disabilities or childcare issues.
Love London Working is just one of thousands of similar projects across the UK, which are heavily funded by the EU.
The fact that the EU invests billions of pounds into the UK’s research, innovation and social projects every year has rarely been mentioned in the Brexit debate. This investment is intended to reduce inequalities, drive economic development, and generally make the UK a more pleasant place to live, work and study.
What is at stake?
As an MEP representing London, my primary focus is on how Brexit will affect the capital. London may be the UK’s wealthiest city, but it is also the most unequal. In fact, Inner London qualifies for a particular category of EU funding due to its sky-high levels of youth unemployment. The capital is also suffering from a chronic skills gap – a problem that only looks set to worsen in coming years as EU nationals continue to choose to take their talents elsewhere.
My recent report, Losing it over Brexit, finds that London currently receives more than £500m from the EU every year to help overcome these problems. This money comes through an assortment of different funds – some as grants, some as loans, and all requiring an element of match funding.
Among the best known are the European Structural and Investment Funds (ESIF), which invest roughly £98.1m (€106.9m) each year into job creation and building a sustainable, healthy environment in London.
The Horizon 2020 fund contributes an immense £301.2m (€328.3m) annually into research and innovation, driving economic development and creating jobs in the city. London receives about 25% of the Horizon 2020 funds that come into the UK, and two of its universities – UCL and Imperial College – benefit more from these funds than any other EU higher education institutions, except for Oxford and Cambridge.
Meanwhile, Erasmus Plus invests £7.2m (€7.8m) annually into modernising London’s education, training and youth work. It also provides opportunities for people to work and study across the EU.
These funds trickle down into thousands of diverse projects. Some impact whole communities, while others target specific groups or sectors. Love London Working, the example outlined above, received £6.6m – 50% of its total funding – from the EU’s ESIF funds. Another project, Better Futures, benefitted from £823,000, to manage a co-working space and provide innovation support to improve the success rate of new low-carbon enterprises in London. And Inspiring Women received £500,874 to provide support to women who face barriers to starting or sustaining their own businesses.
Initiatives and projects span a range of social needs – from supporting refugees and asylum seekers as they seek to integrate into new communities, to promoting urban generation in areas of social and economic deprivation. There are no two ways about it: these funds change lives, and improve the city we live in.
It would be a huge mistake for the UK to walk away from these discrete funding pots. Yet, at the moment, that’s exactly what the government looks set to do.
What happens next?
The programmes will remain open until 2020, and the Chancellor has committed to honouring any EU funding agreements that were signed before the Autumn Statement 2016. After these finish, he says, the UK will continue to fund projects that provide “good value for money” and are in line with its as-yet-undefined “domestic strategic priorities”.
The government has also promised to launch a ‘Shared Prosperity Fund’ in order to “use the structural money that comes back to the UK as a result of Brexit” to reduce inequalities and “deliver sustainable, inclusive growth based on our modern industrial strategy”. Unfortunately the government’s Industrial Strategy – published in November 2017 – simply lays out its intention to consult on the Fund in 2018. As we roll into April, it remains silent on the matter.
Should we be worried?
If the UK government does receive a “Brexit bonus” – which appears increasingly unlikely – it cannot be trusted to spend its newly-acquired funds on these types of socially-focused projects.
I have serious doubts that the government’s “domestic strategic priorities” align with the priorities of most Londoners. Over the past eight years, central government’s ruthless budget cuts have crippled council-funded services for many vulnerable, young people. A new report by Sian Berry, Green Party London Assembly Member, finds that £39m has been cut from council youth service budgets in the city since 2011/12. This has had a devastating impact: 81 youth club and council youth projects have shut their doors, and more than 800 youth service full-time jobs have been axed. These are not the actions of a Government that cares about the welfare of young people.
Moreover, when it comes to investing newly-acquired funds into grassroots organisations, the government’s record is patchy. In 2012, the Treasury and Ministry of Defence were handed £773m in Libor fines to allocate to good causes. The National Audit Office later found there to be huge flaws in the grant-making process, with some £181m of the funds remaining unspent.
If the government hopes to replace any lost EU funding, there must be a system in place to ensure a smooth, efficient transition. This would take at least two years to establish. Ministers’ current tactic of kicking the can down the road is short-sighted, and the cause of immense anxiety for those who will lose out if these funding streams disappear.
What needs to be done?
The financial prognosis for Brexit is deeply worrying. The Mayor of London predicts that a no-deal scenario could shed as many as 87,000 jobs in London alone. In light of this evidence, we must fight to ensure that Brexit doesn’t also destroy the safeguards that exist to catch the very people who will inevitably be hit hardest.
That’s why I am calling on the government and the London Mayor to ensure that London’s people and communities don’t lose out on funding as a result of leaving the EU. It’s crucial that they immediately begin to build a robust new funding regime, based on the most effective parts of the EU’s existing programme. Any newly-available funds must be decentralised to City Hall which can ensure they reach the Londoners who need them most.
At this time of increasing political and social polarisation, civil society projects and initiatives are part of the glue holding our fractured society together. We must not allow them to be trampled in the rush towards an ideological and irrational Brexit.
The views expressed in this analysis post are those of the authors and not necessarily those of the UK in a Changing Europe initiative.