INTRODUCTION

The results of the EU referendum showed profound spatial differences in opinion across the UK. Inequality has been widely discussed as a major factor explaining these differences, with some of the highest shares of the Leave vote in areas experiencing greatest economic difficulty, especially in northern England and Wales. The UK Government appears to share this view, with the prime minister making a series of political commitments to address inequality. The new industrial policy of the renamed Department of Business, Energy and Industrial Strategy includes recognition of the “importance of place”.

The question is how the rhetoric will be translated into practice. A once powerful domestic UK-wide regional policy has been largely whittled away, with divergent approaches to regional development following devolution and the disappearance of regional development institutions and instruments, superseded by local and urban initiatives with variable resources, coherence or permanence. The one policy that has been maintained over the long term will be phased out as part of Brexit. This is EU structural funds – which is currently providing an allocation of £10 billion of EU funding to the UK over the 2014–20 period.

This provides a challenge and an opportunity to the UK government and to the devolved administrations. The loss of EU structural funds significantly affects the “Less-Developed Regions” of West Wales & the Valleys, Cornwall & the Isles of Scilly, as well as in the former industrial regions that were major beneficiaries of EU funding, not least those that could have anticipated significantly more EU receipts after 2020, such as Tees Valley and Durham. While the UK government has guaranteed funding for any structural funds projects approved until the UK leaves the EU, it has not made any commitments to replacement funding for recipient regions thereafter.

Resources are not the only issue. EU cohesion policy provided stability through multi-annual programmes, promoted a strategic and integrated approach to development and required partnership-working between central and subnational levels of government. Although the technical administration of EU funding has become increasingly complex and prescriptive, its disappearance will leave a void.