Yorkshire metro mayor's Dan Jarvis 'smoke and mirrors' claim over vital recovery funds

The economic recovery of the North from the pandemic could be "seriously undermined" by a failure to properly replace vital regional development funds, according to Yorkshire's only metro mayor.

Sheffield City Region Mayor Dan Jarvis says funding support for regional development will be substantially cut next year and that much of what is left will be taken back from local control to Whitehall.

The reduction and restricting of funds means South Yorkshire and the North could lose out on hundreds of millions of pounds to invest in jobs, skills and businesses, just as they look to recover from the COVID pandemic.

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Sheffield City Region metro mayor Dan JarvisSheffield City Region metro mayor Dan Jarvis
Sheffield City Region metro mayor Dan Jarvis

The Government’s Spending Review announced replacements for two key regional development funds, the Local Growth Fund (LGF) and the European Union Structural and Investment Funds.

But according to Mr Jarvis, the proposed Levelling Up Fund to replace the LDF will only be worth £1.3bn a year compared with £1.5bn for the existing fund and will only bring in £600m this year.

EU funds will be replaced by the Shared Prosperity Fund but the mayor says it will take time for the new scheme to reach the £1.5bn a year coming from Brussels, with only £220m allocated this year.

This means that the regional development spending through the two new schemes will be just £820m compared with the £3bn average from EU funds and the LGF.

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It comes as criticism grows over the Government's decision to slash the funding for strategic body Transport for the North.

Mr Jarvis, who is also a Labour MP in Barnsley, said: “These figures show that the government is levelling up in name only.

"Just when they should be pulling out all the stops to help us recover from COVID and deliver the transformational investment and devolution for the North they promised, Ministers are cutting crucial funding.

“We need, and were promised, a real step-change for the North – not just matching the previous funding, which would only allow us to stand still, but going well beyond it to finally address the problems that have held us back. Instead we’ve seen smoke and mirrors, with different pots of money simply reshuffled, renamed and re-announced.

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“Just as concerning is the way money will be spent, with the new Levelling Up Fund in its current form controlled by Westminster, with restrictions that make it much harder for regions to attract and nurture growing businesses. This threatens to seriously undermine our efforts to deliver economic recovery and renewal for people across the North."

Asked about the Transport for the North funding cut, the Prime Minister's spokesman said he had spoken about delivering his levelling up agenda for the last 12 months "and that remains his priority". The Government said last month that the Levelling Up Fund will “support the fabric of everyday life, including high streets and train stations”.

Meanwhile, Boris Johnson has been told by a senior Tory backbencher that his leadership will be "on the table" if the Government does not back off on Covid restrictions.

Steve Baker of the lockdown-sceptic Covid Recovery Group has written to members urging them to put pressure on the Tory chief whip over the issue.

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Mr Baker, who played a prominent part in Theresa May's downfall, warned that unless the issue was dealt with now it would become a matter of leadership.

It came as a separate group of northern Conservative MPs, led by former Minister Jake Berry, warned Chancellor Rishi Sunak that families and businesses in the region needed certainty in his March Budget.

The Northern Research Group of 65 MPs said people in the North face a series of cliff edges over the coming months as existing support programmes come to an end and Bounce Back Loans become repayable.

And they say “extensions are necessary to protect families and individuals caught up in the economic fallout from the pandemic.”

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The group are also urging Mr Sunak to aid the region’s economic recovery whilst interest rates remain at a record low, by prioritising small regional infrastructure projects, moving more government departments out of London and fully-financing Town Deals and High Street projects.

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