Leaving the EU: European Social Funding in Scotland and the UK

(Limited Text - Ministerial Extracts only)

Tuesday 10th January 2017 Westminster Hall

[The Economic Secretary to the Treasury (Simon Kirby)]

It is a great pleasure again to serve under your chairmanship, Mr Nuttall. I congratulate the hon. Member for Glasgow East (Natalie McGarry) on securing the debate and on her thoughtful contribution. I also thank the hon. Members for Argyll and Bute (Brendan O'Hara), for East Renfrewshire (Kirsten Oswald) and for Glasgow North West (Carol Monaghan) for their additions to the debate, which has been useful and interesting.

The European social fund was set up with the objective of creating a more cohesive society, as well as a more prosperous economy throughout the EU. Projects throughout the UK, including in Scotland, have received funding from the fund. Under the ESF programmes for 2014 to 2020, a total of €466 million was allocated to Scotland. Funding for some 123 projects has already been agreed. The previous ESF programme in Scotland saw more than 430 projects funded and completed, and more than 390,000 people supported. In England, 86% of participants said that they had, for example, developed skills required in work.

Leaving the EU means that we will want to take our own decisions about how to spend our own money, which will continue to deliver the policy objectives previously targeted by EU funding. That is the context in which we have gathered for this debate. I would like to start by saying that I recognise the concerns of the hon. Member for Glasgow East and others who have spoken so passionately in the debate. She asked for certainty. I agree that it is essential that we provide certainty for recipients of ESF funding. That is why in October my right hon. Friend the Chancellor of the Exchequer announced certain guarantees.

All European structural and investment funds projects signed before last year’s autumn statement will be guaranteed, including those funded by the ESF. That also includes those projects that will continue beyond the UK’s departure from the EU. Moreover, funding for projects signed after the autumn statement, but before we leave the EU, will also be guaranteed—that is, providing that the responsible Department is content that the projects provide strong value for money and are in line with domestic strategic priorities, which are both reasonable points.

[Carol Monaghan]

All those assurances were very welcome when they were made, but the problem remains that we have an issue beyond that. We need to look to the future. We need a guarantee of funding—a pot of funding that will still be available for further and higher education way into the next decade.

[Simon Kirby]

I recognise the hon. Lady’s point, which I will cover. It is important that we have a long-term objective, that we spend money wisely and that we get the best possible solution.

The Government will ensure that the devolved Administrations are funded to meet the commitments they have made under current EU budget allocations. Given that the administration of EU funding is devolved, it will be for the devolved Administrations to decide the criteria used to assess projects.

I would like to respond to some of the specific points made. I want to reassure the hon. Member for Glasgow East about the guarantees, to which I referred, announced by my right hon. Friend the Chancellor—specifically, to ensure that recipients of funding throughout the UK, including Scotland, will have payments guaranteed. After Brexit, they will continue to be guaranteed. They will not be frozen or clawed back during the negotiations. That is an important point. The Government have committed to consulting stakeholders to review all EU funding schemes in the round. In the meantime, the Chancellor has made two guarantees, which I have mentioned. The hon. Lady’s questions are the very types of question that we hope and anticipate stakeholders will raise in the consultation, and the Government will listen carefully to everyone’s contributions.

It is also worth putting it on record that the UK Government’s decision to focus on investment, which was announced in the recent autumn statement, will result in the Scottish Government’s capital budget being increased by some £800 million by 2021—money that can be used to boost productivity and promote growth in Scotland. Significantly, the Scotland Act 2016 also enables the Scottish Government to raise more than half of its own funding.

In conclusion, as we are all very aware, the UK will leave the EU. The Government are determined to make a success of that for all of the UK, including Scotland. We have been clear about the contribution of funding secured through the ESF, but leaving the EU means that we will want to take our own decisions about how to spend UK money. Brexit will allow us to do that. The Government will work closely with the Scottish Government to get the best possible deal for all parts of our United Kingdom. We will give the Scottish Government every opportunity to have their say as we form our negotiating strategy, and the Government will continue in the coming months to consult stakeholders to review all EU funding schemes in the round. We are very much in listening mode.

Our aim will be to ensure that any ongoing funding commitments best serve the UK’s national interest while ensuring appropriate certainty. The Scottish Government and other devolved Administrations will be fully involved. In the meantime, it remains important that recipients of ESF funding continue to implement good value projects. The coming years will present a number of opportunities, which we must grasp and maximise. I am encouraged by the commitment of those who have spoken in support of vital schemes in their constituencies, and we will continue to work closely with all partners to ensure that every part of the UK prospers.

Question put and agreed to.