Michael Gove accused of hijacking the North with post-Brexit fund

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The North East is set to receive more than £150million from the government’s post-Brexit ‘shared prosperity fund’, it has been announced.

Leveling Secretary Michael Gove said the money, which amounts to £2.5billion domestically over the next three years, “will help spread opportunity and level the country “. But there are accusations that the North has been harmed by the fund, which replaces money previously granted by the European Union.

During its EU membership, the UK received an average of £1.5 billion a year in structural funds between 2014 and 2020 from Brussels. But the replacement SPF will only be worth around £400m this year, £700m next year and won’t reach the previous level of £1.5bn until 2025.

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The government has argued that all it needs to do is ‘match’ EU funding levels by 2024-25, as the UK will continue to receive its final allocation of EU money until the. In total, the fund will see Newcastle, Northumberland and North Tyneside receive £47million through the North of Tyne Combined Authority, while Gateshead will receive £11,634,466, South Tyneside £8,868,632, Sunderland £14,936,161 and the county of Durham £30,830,618.

Previously, the North East received over £400m between 2014 and 2020 from the EU.

The Institute for Fiscal Studies think tank said the SPF was a ‘missed opportunity’ and criticized the Department for Leveling Up for following an ‘arbitrary’ formula which favored areas such as Cornwall and the Welsh Valleys, in the detriment of the North.

IFS Associate Director David Phillips said: “Brexit has provided an opportunity to streamline the funding framework, ensuring it uses up-to-date estimates of population and socio-economic conditions. It is disappointing that instead the UK government has ‘taken back control’ to stick with an arbitrary, ill-conceived and outdated funding allocation mechanism.

Northern Powerhouse Partnership director Henri Murison has warned that some regions could see their funding drop by a third, compared to what would have been on offer if Britain had still been in the EU.

He said: “We cannot escape the fact that this is a huge drop in funding available for economic development. There is no more overlap between funding periods, which means less money as a whole, and the regions will not get seven years of certainty when they do with EU structural funds.

“In addition, venues have less freedom to spend funds as they wish and must first make spending decisions beyond Whitehall. It’s a big step back and it’s very far from being a real deconcentration.”

Mr Gove was optimistic however as he announced the SPF this morning, he said: ‘We have taken back control of our money in the EU and we are empowering those who know their communities best to deliver on their priorities. UK Fund for Shared Prosperity will help unleash the creativity and talent of communities that have long been overlooked and undervalued.

“By targeting this funding to the areas of the country that need it most, we will help spread the opportunities and raise standards across all parts of the UK.”

ChronicleLive has been told that the UK Shared Prosperity Fund’s allocation formula takes into account “local population data and a broad measure of need, including factors such as unemployment and income levels”.

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