LGA warns on risk of having to return £730m in unspent EU funds

More than £730m of European Union funds that could help local economies recover from the Covid-19 pandemic has been left unspent by Whitehall, the Local Government Association (LGA) has claimed.

It said the money would have to be returned to EU if it was not spent by the end of this year.

According to the LGA the money represents 24% of England’s allocation of the European Social Fund, which can be used to support employment, skills and training.

It said councils were also concerned about the lack of detail around the Government’s proposed UK Shared Prosperity Fund - which will replace EU funding - and wanted to help co-design it.

Kevin Bentley, chairman of the LGA’s EU Exit Taskforce, said: “The Government needs to make sure the remainder of this fund reaches the local communities that need it desperately following the devastating economic impact of Covid-19.

“Councils and combined authorities are ready to work with government to make sure that local residents and economies can reap the benefits of this funding.”

A Ministry for Housing, Communities and Local Government spokesperson said: “The Government continues to participate in EU-funded programmes, meaning projects will continue to receive funding until the end of the current programme in 2023.

”We are committed to targeting the UK Shared Prosperity Fund at the UK’s specific needs, and at a minimum matching the size of European structural funds in each nation.

“We are working closely with interested parties across the UK as we develop this fund and to allocate all remaining EU funding.”

Mark Smulian