City regions threaten legal action over allocation of EU funding

Two city regions have threatened legal action against the Government over its allocation of monies from the European Regional Development Fund.

A pre-application letter has been sent on behalf of the Liverpool City Region and the Sheffield City Region to the Department for Business, Innovation and Skills, which decides how the EU funds are allocated.

The Liverpool City Region – which comprises Liverpool, Sefton, Wirral, Halton, Knowsley, and St Helens – said it faced a 60% cut during 2014-2020 when compared to the previous programme that ran from 2007-2013.

The region will get 222m euros (£185m), equating to 147 euros (£128) per head for the next seven years, compared to the previous period’s 380 euros (£325) per head.

It also highlighted how it would get less per head of population than the rest of the North West, “despite having a lower GDP than Greater Manchester, Cheshire and Warrington, Lancashire and Cumbria”.

Liverpool City Region said it understood that the allocation made by the Government was 100 million euros less than it would have received under the funding formula used by the European Commission.

The region also pointed to how the Government had decided to reallocate £650m of ERDF funding away from England to Scotland, Wales and Northern Ireland. This sum included £350m ringfenced for poorer areas known as transition regions, of which Liverpool City Region is one.

Both Liverpool and Sheffield City Regions argued that a safety net should be applied to the new funding allocations to limit the reduction. It was this rationale that led to the reallocation away from England.
 
Councillor Paul Brant, Deputy Mayor of Liverpool, said: “It is regrettable that we have had to take this action, but we are left with no option. It is clear that despite months of lobbying both before and after the announcement, the Government is burying its head in the sand and hoping we will simply go away.
 
“It is vitally important we send out a clear message about the unfairness and injustice over the allocation and let them know we are not prepared to accept it without a fight…. we have been advised we have good grounds for a legal challenge.”

Cllr Brant claimed that DBIS’ decisions had led to a “bizarre and baffling situation where areas better off than ours will receive more funding per head of population”.