England & Wales Brexit

Viewpoint: Making the case for the North East in a post-Brexit world


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Cllr Iain Malcolm, Leader of South Tyneside Council updates us on the North East’s challenge to central government over the Brexit negotiations.

It is hard to believe that five months have passed since I last blogged on Brexit. While Brexit continues to dominate news headlines, local government still seeks reassurances on its impact for our residents and businesses.

The vital role of councils in the Brexit process cannot be underestimated. As I’ve said before, we are in a unique position to assess and react to the needs of our communities. Not only are we the drivers of economic resilience through housing, development and infrastructure, when it comes to community cohesion and support to residents, councils are on the front line.

It is clear that turbulent times are ahead, we need an understanding of how our communities will be affected by Brexit and the challenges we will need to support them through – not to mention the resource to do so.

In December, the UK government published a joint report from the negotiators of the EU and the UK summarising the progress made on the first phase of negotiations. The report outlined the wider agreements made but included the caveat that until every aspect of the deal is agreed and signed-off nothing can be assumed as being formally completed.

Agreement has been reached in principle about three major areas under consideration:

  • Protecting the rights of EU citizens in the UK and UK citizens in the EU
  • Addressing the unique circumstances in Northern Ireland
  • The financial settlement

Particularly important was the news on EU funds and citizens’ rights, specifically that local communities will continue to benefit from EU structural funds until at least the end of current programme in 2020 and that there will be reciprocal protection for EU and UK citizens.

This means that there will be the continuation of activity such as business support and skills provision which are vital to growing economies. This has at least provided skills suppliers with the confidence to continue provision until 2020.

It is now essential that further clarity is provided on funding beyond 2020 however –  how these funds will be drawn down, the way in which they will be distributed and importantly when we can start the work to ensure there is no gap in activities as a result of a hiatus in the funding. The Government’s promised consultation on the UK Prosperity Fund is yet to emerge. It is vital that we get some clarity on what will be an important resource to promote inclusive growth and productivity.

Based on our experience in delivering European funded programmes and wider local growth strategies, and using lessons learned, in the North East we want the UK Shared Prosperity Fund to include:

  • a long-term, fully devolved funding programme, aligned to the regional strategic economic framework (the North East Strategic Economic Plan(SEP))
  • a multi-year funding programme (minimum 7 year); Fully devolved to the North East to allow strategic management and long term investment decisions
  • funding at least at a scale of the current EU structural fund programme (c. €560m)
  • a start date before 2020/2021 to ensure continuity in activity
  • a flexible fund which avoids a restrictive siloed approach, and instead funds activities across areas such as innovation, skills, business support, regeneration, and employment support, to fit the needs of the area
  • targeting  to reflect economic conditions, recognising the latent potential in many currently underperforming areas, and not allocated on a competitive basis
  • support for the aim to reduce disparities between and within regions; a shift towards more broadly defined growth benefits (e.g. ‘quality GVA’)
  • flexibility to both lever in private funds or other public funds where this is suitable or offer a wholly-financed approach where appropriate
  • flexibility to fund both revenue and capital.

We hope to be able to formally respond to Government’s consultation on the UK Shared Prosperity Funds shortly.

Following on from our Brexploration event in South Tyneside last summer, North East regional partners have now collectively published a group of key messages about the North East priorities. These draw on the key messages we laid out during Brexploration.

Now more than ever it is vital that our view, and those of our partners, help shape the Brexit negotiations.

In addition to the North East submission our Brexploration report has been presented to key government departments and ministerial teams.

Virtually every element of Brexit affects local government, our communities and businesses, from economic conditions, jobs and employment, to the people who make up our communities and workforces, and the environment in which we live and work.

If we are to deliver services effectively then we must have a say in the regulations which govern them. It is vital that the region’s voice is heard during upcoming negotiations. Indeed the voice of all local authority leaders is important. It is clear that we need to reflect what our communities wanted when many voted for Brexit. It is up to local authorities to take leadership and help provide both voice and stability as Brexit affects every part of our economy.

There are two critical policy issues that pose existential threats to the North East, the first is the future funding for the region, which has benefited greatly from EU Structural funds.

Without certainty over a replacement for these funds or the clarity in how we are going to continue supporting and growing our economy, we risk falling off a cliff edge.  That will seriously disadvantage the region, at a time when our economy needs to be strong and resilient to prosper globally.

The second issue is the potential impact on our manufacturing sector. The North East is a strong exporting region. Whether or not we stay in the customs union and the knock on effect of that decision needs to be understood for us and many other regions in the UK.

Others may be happy for London to dominate the Brexit‎ discussions, but we are taking the case for the North East, and what we want, to them.