EU and UK need a radical reinvention of regional policy and planning, by Cliff Hague

Brexit has dominated the UK news agenda, but scant attention has been paid to its impact on the EU, and the EU's capacity to address the kind of regional disparities that decided the 2016 referendum.

The EU works on seven-year budget cycles, and the jockeying for a share of the cake in the next spending round begins well before any current round is finished. The competition for 2020-2027 funds has been complicated by Brexit, which will leave a hole in EU finances. There are also new demands in relation to defence and to migration. It means that the budget for future cohesion policy, the most territorially responsive area of EU investment and its second largest spending programme after agriculture, is under serious pressure.

A 2017 paper by the European Commission stated emphatically that "the status quo is not an option" for the EU. It sought to make "cohesion policy more effective and maximise the impact of its investment", language that betokens budget cuts. Amongst the options raised was whether cohesion funds should be available to better off countries and regions? In addition, it asked whether levels of national co-financing should be increased. Then, last year, the Commission proposed reducing cohesion policy’s share of the diminished EU budget from 34% to 29%.

One response has come from the European Economic and Social Committee, the voice of organised civil society. It states that "the proposal to reduce the size of the cohesion policy budget for the period 2021-2027 is unacceptable." Further, "EU cohesion policy must have a strong territorial approach, aimed at empowering each region with the necessary tools to enhance their competitiveness in a sustainable way" and so all regions should continue to be eligible. All of this matters for two reasons. Firstly, notwithstanding its faults (which include bureaucracy and limited integration with other programmes at EU and national levels) there is evidence that cohesion policy helped regional recovery from the double dip recession of 2008 and 2011. Indeed one finding of the 7th Cohesion Report was that recovery was weakest in "middle income regions", those with GDP per head close to the EU average. Their costs are higher than those in poorer regions, but their innovation capacity lags behind that of the more prosperous regions.

We know that the vote for Brexit in 2016 was substantially higher in less affluent parts of the country: the "left behind" moniker given to them by the media is inappropriate, as it implies accidental oversight, rather than deliberate intent. At a time when far right politicians are on the front foot in many such regions across Europe, the cuts proposed by the European Commission for cohesion policy should be a cause for concern. Similarly, the tokenistic £1.6bn over 7 years Stronger Towns Fund recently announced by the Westminster Government and targeted at Leave-voting English regions, demonstrates, at best, a failure to grasp the challenges to national cohesion posed by regional inequality. A radical reinvention of regional policy and planning is needed for the EU and the UK.

Cliff Hague OBE is a freelance consultant and a patron of PAS 

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