Yorkshire's economy faces cliff edge with vital Local Growth Fund set to run out in March, says Sheffield City Region metro mayor Dan Jarvis

Ahead of the spending review being delivered by Chancellor Rishi Sunak next week, Sheffield City Region mayor Dan Jarvis has called on the Government to extend the Local Growth Fund (LGF) to "unleash growth across the Northern Powerhouse".

The fund has seen more than £1.3bn handed out by Westminster to Local Enterprise Partnerships (LEPs) in Yorkshire and the Humber since 2014 to create jobs, attract further investment and transform the region’s town and city centres.

But the fund, which was brought into being as a result of a 2012 report by former Tory Deputy Prime Minister Lord Heseltine, is due to expire in March and the Government is yet to set out plans for a successor.

Labour mayor Mr Jarvis says the fund must be extended to give he and his counterparts around the country the tools they need to rebuild regional economies in the wake of the pandemic.

He also fears that the downgrading of next week's spending review announcement by North Yorkshire MP Mr Sunak to a single year review, rather than covering multiple years, "has left the region facing a cliff edge, at precisely the time it needs certainty".

The Government was challenged over the issue at a Westminster debate last week, with Exchequer Secretary to the Treasury Kemi Badenoch telling Yorkshire MP Tracey Brabin: "She will be aware that this is a matter for the impending spending review, and it would not be appropriate for me to pre-empt the outcome of that process".

There have been three 'growth deals' since 2014, with funding handed to LEPs because of their role in boosting economic growth around the country. In Yorkshire the Leeds City Region has received £695m, the Sheffield City Region £365m, the Humber £141.5m and York, North Yorkshire and East Riding £145.9m.

Mr Jarvis said it had helped unlock £500m private sector investment in South Yorkshire’s economy, including the investment of world-leading firms Boeing and McLaren Automotive. It has helped create 15,000 jobs, 2,000 apprenticeships and supported 8,000 people to improve their skills.

He said: “The Local Growth Fund, under the stewardship of South Yorkshire’s leaders, has helped change the face of our region. We’ve cemented our reputation as the heartland of British industry and innovation and made our towns and city better places to live, work and invest.

“South Yorkshire is open for business, and ready to prosper despite the challenges COVID throws at us. We’re investing money from our landmark devolution deal to start our fightback form the pandemic, yet the uncertainty of the future of the LGF hangs over us and threatens to derail our progress.

“Extending the fund will unleash growth across the Northern Powerhouse. We have businesses ready to invest and plans ready to go to deliver prosperity for our people and places. We can deliver recovery and renewal and stand ready to be levelled up.”

Among the economic and infrastructure investment plans in the Sheffield City Region which could be made reality with growth funding is connecting two of the region’s largest innovation hubs, the Advanced Manufacturing District in Rotherham and the Olympic Legacy Park in Sheffield, to boost the progress of ground-breaking research and development in South Yorkshire.

David Kerfoot, who chairs the York and North Yorkshire LEP, said the LGF "has created so many positive investments across our region and leveraging much private investment at the same time".

He added: "It's essential for LEPs to see continuity in this programme and a three-year fund would not only ensure continuity but also give us the ability to continue to make a real difference on the ground where it matters.

"Given the current challenges it would also mean giving us the ability to build growth and stability ensuring our communities prosper."

The Treasury announced last month that the spending review, seen as one of the key events of any Government as it sets out its funding priorities, would cover just one year rather than until the next General Election.

Richmond MP Mr Sunak said: "In the current environment it's essential that we provide certainty. So we’ll be doing that for departments and all of the nations of the United Kingdom by setting budgets for next year, with a total focus on tackling Covid and delivering our Plan for Jobs."