UK replacement for European Union support funds should give spending powers to local communities, according to a new report from think tank IPPR.

European structural funding – currently worth around £1.2 billion a year to the UK – is due to be replaced by a ‘Shared Prosperity Fund’ after the UK leaves the EU. But 30 days before the Brexit deadline, the Government is yet to set out how the new fund will work.

Today’s IPPR report ‘Regional funding after Brexit – opportunities for the UK’s shared prosperity Fund’ argues that powers over the funding should be devolved to combined authorities and that residents should have a direct say in how the funds are used. The UK is highly centralised and its economy is geographically imbalanced. Residents’ panels – made up of a representative sample of the population – could better inform regional spending decisions and give more control to local people, IPPR says.

The report says that giving local government and communities more powers over the use of regional funds will strengthen local democracy, reduce bureaucracy and improve spending decisions.

It proposes drawing on recently-developed ways to engage with communities. These include Poverty Truth Commissions, which bring together local decision makers and people with direct experience of poverty, and citizens’ juries, which allow communities to deliberate and decide on local issues.

The report also argues that the basis on which EU funding is distributed between different regions of the UK should be rethought. Under the current system, funding is targeted on regions with the lowest GDP per head. But IPPR says a more holistic approach is needed.

It recommends that:

• Places with higher levels of poverty and lower incomes, included in a “dashboard” of measures of local need, should receive more funding than under the current system. Under new measures regions such as the West Midlands and parts of Yorkshire might receive more.
• Neighbourhoods and local communities should be allocated at least 20 per cent of the funds to spend on their own priorities, or on developing social infrastructure – such as building community centres and creating green spaces.
• Combined authorities should be encouraged to experiment with new approaches to investing the funds, such as community-owned businesses and cooperatives.

Read ‘Regional funding after Brexit – opportunities for the UK’s shared prosperity Fund’.