London is joining other cities, towns, and regions across the country in calling for an increase to “overall national funding” for local economic growth, according to a letter sent to the Chancellor of the Exchequer ahead of the 11 March Budget.
Spearheaded by the cross-party group London Councils and the Mayor of London and signed by leading representatives from London’s business, public, and voluntary sectors, the letter emphasises the “urgent” need for the government to clarify its funding plans.
It highlights to the Chancellor the “overdue matter” of replacing European Structural and Investment Funds (ESIF), which are scheduled to end following Brexit. The government has previously promised a UK Shared Prosperity Fund (UKSPF) to replace both European and domestic funds for economic growth, but no details have yet been released.
Although the letter’s signatories welcome the proposed UKSPF as an opportunity to “create a less bureaucratic, fully devolved and flexible single pot of long-term funding”, they warn that “replacement funding is needed now” to enable investment planning for the coming years.
Emphasising how this funding is crucial for meeting local economic and social challenges and moving to a low-carbon economy, the letter pushes for London to receive “at least as much funding” as via the ESIF and domestic Local Growth Fund programmes. It also insists any future allocations must be based on a “fair measure of need”.
The current £1.35 billion London ESIF programmes support 444,000 Londoners and 8,000 businesses. London’s £440 million Local Growth Fund programmes are estimated to have created or safeguarded over 10,000 jobs and helped over 200,000 people learn new skills.
London accounts for almost a quarter of the UK’s total economic output and makes a net contribution to the Exchequer of £34.3bn in 2017/18 . However, the capital also faces significant levels of need – including the highest poverty and homelessness rates in the country .
A recent report from London Councils and the charitable foundation Impetus found young Londoners are more likely to be out of education, employment, or training than the national average . It is estimated that there are 1.3 million economically inactive Londoners of working age – a figure larger than the entire population of Birmingham .
The letter’s signatories suggest the government’s national targets for reducing poverty “will only work if London is part of the focus”.