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EU funding cuts were legal, law lords rule

The Supreme Court has rejected by a 4-3 majority an appeal brought by councils in Liverpool and Sheffield against the allocation of European funding from 2014 to 2020.

Lawyers for Liverpool City Region and Sheffield City Region brought a joint action arguing the reduction was disproportionate compared to other areas.

EU funding is handed down from Brussels to member states, who use their discretion in how they choose to distribute the money.

In a change from the previous seven-year programme, Merseyside lost its special ring-fenced allocation as a historically poorer area. Merseyside's funding tapered down from 2007 to the national average by 2013, the year used to set the allocation for the current round. Lawyers for Merseyside and Sheffield argued this was unfair treatment compared to Northern Ireland and Highlands & Islands, which were on similar transitions programmes in 2007-13 but awarded increases in 2014-20.

The law lords who dismissed the appeal said the matter was political and ministers were allowed to use their own judgment, that the decision had been approved by the European Commission, and that the tapering effect of the last round of funding meant the greater level of funding was not intended to last forever.

The Highlands & Islands will receive around €400 per capita and Northern Ireland €260 compared to €120 in Sheffield and Merseyside. In the last round Merseyside received €380 per person. The total allocation for Merseyside this time is €202m, down from €513m in 2007-13. The local authorities said it should have been €350m this time.

European aid, often awarded through the European Regional Development Fund part of the programme, has been used to pay for the construction of the Arena & Convention Centre, Liverpool Science Park, Liverpool South Parkway train station and many commercial developments which would otherwise have been unviable.

Liverpool Mayor Joe Anderson said: "This is a disappointing result, but it is clear that the legality of the judgement has split the highest judges in the land, which shows that we made the right decision in appealing it.

"We maintain that as Liverpool is one of the most deprived areas in the country, the Government should have fully assessed this to make sure there was no unfair discrimination when making its decision.

"European funding is meant to tackle economic inequality, yet as the poorest area in the North West we were awarded far less funding per head than the rest of the region, including wealthier areas such as Cheshire.

"The bottom line is that the Government took €275m of funding allocated to English regions such as Liverpool and gave it instead to Scotland and Northern Ireland. They dressed this up as protecting them from being disproportionately affected by funding changes, yet the reality is that in percentage terms we have lost twice as much as they stood to lose.

"The Government has played the role of Robin Hood in reverse – taking from the poor to give to the rich.

"I am calling on them to do the right thing and reconsider. But I won't hold my breath."

Your Comments

the addiction to grants has held the market back for years in liverpool – it’s time to get over it – take this is a cruel-to-be-kind favour

By Rab

European funding has been essential to rebalance the structural issues of the collapse of the historic port-based economy of Liverpool and its region; an economy that served an industrial hinterland stretching for more than a hundred miles. The industries and towns of Manchester, the Midlands and Yorkshire would never have developed without the port of Liverpool and the city’s role in international trade. But that specialism, and reliance, on international trade came at a price. The Liverpool region’s GDP (and GVA) remains some 15 percentage points lower than places like Manchester. European funding is intended to address these structural imbalances, and Liverpool, along with Sheffield, (and a few smaller parts of England), will be the only areas within the EU that were earmarked this funding by Brussels, to have it denied to them by their own national government. I wonder if lobbying from Manchester had anything to do with it? George Osborne, MP for Tatton, certainly did.

By Paul Blackburn

Well said Paul

By Russell

Comments that portray European structural funding as some sort of compensation are wrong headed. On that basis perhaps Liverpool should share it with the former colonies it "traded" with, places which specialised in the production of commodities in the service of British, and most notably Liverpool’s, economic development. But that would be absurd because we are talking not about compensation but deliberately planned, government directed and strategic regeneration activity backed with huge amounts of public cash over several decades. This largesse includes not only the projects in the article but huge employers like Ford, Vauchall, JLR, thousands of hectares of reclaimed land,hundreds of repurposed buildings, hundreds of millions on business investment grants and skills programmes and even, lest it be forgotten, the Merseyrail loop and link lines of the 1970s. All this has helped to diversify Liverpool’s economy tremendously and effect much of the structural change It was designed to do. But there is still much to do which is why it is quite shocking and perverse to see this funding sent to Wales, NI and especially Scotland. It would be interesting to see this case taken to a higher court.

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