1. Governance
December 19, 2017

Jean Lambert MEP: London’s communities will lose £500m thanks to Brexit

By Jean Lambert

A quick glimpse at this month’s headlines paints a grim picture of the UK’s social standards. Income inequality is at its widest since the mid-1980s, one in five people live in poverty, child homelessness is at a 10-year high, and food bank use is an alarming 20 times higher than it was in 2010.

The Prime Minister has assured us that leaving the European Union will create a “stronger, fairer and more prosperous future for us all”. However, there’s one issue she’s so far conveniently failed to mention. Leaving the EU will cut the UK off from an assortment of funding pots that are earmarked to reduce social and economic inequality.

As a Member of the European Parliament for London, my primary focus is on how Brexit will affect the capital. London is the UK’s richest city, but it is also the most unequal. Inner London actually qualifies for a particular category of EU funding precisely because it has such high youth unemployment.

That means Londoners will be hit particularly hard if they are denied access to this EU funding. My new report “Losing it over Brexit”, released last week, finds that London is set to lose more than £500m towards supporting its communities each year. That’s more than £5bn over the course of a decade.

This money currently comes to London through a number of pan-European funds – some as grants, some as loans, and requiring an element of match funding in order to qualify.

Among the largest are the European Structural & Investment Funds (ESIF) which invest roughly £98.1m (€106.9m) each year into job creation and creating a sustainable, healthy environment in London. The Horizon 2020 fund contributes a huge £301.2m (€328.3m) annually into driving economic development and creating jobs in the city. Meanwhile, Erasmus Plus invests £7.2m (€7.8m) yearly into modernising London’s education, training and youth work, as well as providing opportunities to work and study across Europe.

At first glance, these funding streams may appear somewhat broad and intangible. However, the money trickles down into projects that make a real difference to Londoners lives. For example, Love London Working is delivering basic skills training to 21,000 unemployed people with the aim of helping them into work. Paddington Development Trust is promoting urban regeneration for the public benefit in areas of social and economic deprivation. Inspiring Women is working to encourage women in London to establish and grow their own businesses. Meanwhile, RISE is supporting refugees and asylum seekers as they seek to integrate into new communities in 10 London boroughs.

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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 if they provide “good value for money” and are in line with undefined “domestic strategic priorities”. The Chancellor has shown an interest in continuing to participate in the renowned Horizon 2020 programme, if the UK is given the opportunity to ‘buy in’. However – as we well know – at this stage, everything is to play for.

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”. However – 18 months after the EU referendum – we’re still none the wiser as to how this might work in practice.

I’d also like to point out that if we do indeed save much (if any) money from leaving the EU, there will be a gargantuan number of new systems and procedures to set up and oversee. Under immense financial pressure, can we really trust this government to put any newly-available funds back into these grassroots social projects? After all, it has spent the past eight years inflicting savage cuts on local authorities, in the full knowledge it was deeply damaging thousands of community initiatives.

This is nothing short of gross neglect by the UK government. Many of the organisations surveyed for my new report voiced anxiety about being cut off from their financial lifeline. As ever, the wealthiest in society are unlikely to notice when this money disappears. It’s the poorest and most vulnerable who will suffer when trusted projects and support networks are forced to shut their doors.

That’s why I’m calling on the government and the London mayor to ensure that London’s communities don’t lose out on funding as a result of Brexit. There is an urgent need to map the EU’s existing funding programmes, and build a robust new model around the most effective elements.

Meanwhile, any new funds made available by the government should be decentralised to City Hall which can ensure it reaches the Londoners who need it the most.

There’s a great deal at stake here. As high-level Brexit negotiations rumble on, it’s crucial that ministers don’t lose sight of the massive and successful funding pots at stake. We need concrete guarantees that London’s people and communities will not be harmed by their reckless, blinkered approach to Brexit.

Jean Lambert is Green MEP for London.

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