Rethinking funding for disadvantaged areas after Brexit

European_flag_wavy

Although the EU is not a direct contributor to the NHS our exit from it will cause major problems for the social determinants of health as well as direct problems such as a shortage of trained staff

Last week the Health Foundation published a booklet about the effects of Health on Brexit. It consists of a series of essays one of which is from me. I attach mine below. If you want to look at the whole booklet you can find it here.  http://www.health.org.uk/publication/policies-healthy-lives-look-beyond-brexit

“Any review of the external determinants of health shows there are three key factors that contribute to a person’s wellbeing, which in turn contributes to their health. These are a good job, good pay and a good home (in a good neighbourhood).

These factors have been well quantified but also seem somewhat logical. If you have a good job, go home to a nice house and have a few bob in your pocket you are far less likely to adopt unhealthy behaviours, less likely to suffer stress and anxiety, and more likely to be able to access mental health services when needed..

If logic is not sufficient, then these figures should help to illustrate the link between work, salary and health. Table 1 is a comparison of my ward – Church Ward – in Liverpool (one of the wealthiest) with others and the national average in 2015. This shows that it is far more complicated than a simplistic view of a north–south divide. There are big differences inside both ‘rich’ and ‘poor’ areas.

Table 1:

  Church Ward Liverpool average Liverpool worst performing ward National average
Income per household £43,065 £29,099 £21,135 £36,353
Worklessness 5.3% 15.3% 25.8% 9.2%
Population aged 16 and over with NVQ Level 4 or greater 44.8% 22.4% 9.9% 27.2%
Life expectancy at birth 83.7 years 78.5 years 70.8 years 80.8 years

 

How do EU funds make a difference to health?

The EU has invested in infrastructure in the past and the European Investment Bank still provides funding for health investment projects in the UK. However, in practice, the EU has nothing to do with day-to-day health funding in the UK. Overall, the EU has been and remains a relatively minor source of direct investment in health, but has invested extensively in factors affecting the wider determinants of health.

The EU gives no grants or support for housing, either public or private. What the EU has done for 3 decades is invest massively in poorer parts of the UK and throughout Europe to employment and training schemes. Between 2000 and 2006, there were six Objective 1 areas[1] in the UK that received funding through the EU Structural Funds programme. These were mostly the big conurbations such as Newcastle/Gateshead, South Yorkshire and, of course, Greater Liverpool, but also included one less affluent county – Cornwall. Employment creation provides the money to fund other key health determinants and reduces illness by giving people a central purpose to their lives. It helps to pull them out of poverty, which Table 1 shows is a determinant of health.

The people of Liverpool are more conscious of the need for job creation than many, but there are no regions in the UK where at least some areas or neighbourhoods have not been the recipient of one type of EU funding or another. These aren’t always the most obvious areas in terms of perceived need. As an example, sometimes the most scenic places like the Peak District and Lake District have been common recipients of specific EU funding programmes aimed at supporting hill-top farmers and their environments.

Employment and wealth figures did determine the need for funding though, and were so low in the UK’s six Objective 1 areas in comparison to the rest of Europe between 10 and 15 years that they were granted such status. This was the top priority level for grant giving and the money flowed in. It is based on having a gross domestic product (GDP) per head less than 75% of the EU’s average. In Liverpool, the funding from the programme was used for capital and revenue activities that have transformed the city’s centre.

Without the matched funding from the EU there would not have been a major refurbishment of Liverpool’s museums and galleries and also the creation of a new one. There would have been no new canal, no conference and exhibition centre, and no Liverpool ONE (the biggest new retail centre in Western Europe) and no growth of a myriad of hotels.

Above all, there would have been no European Capital of Culture in 2008, which turned around the image of the city and inspired confidence in other industries to surf in on the rising cultural tide to establish other businesses inside the Liverpool City Region. Although Liverpool no longer has Objective 1 status, it still has substantial amounts of funding coming into the City Region, and will have until the UK leaves the EU.

All that work and more has created jobs. Some of these jobs are not well paid (those in the service sector in hotels and bars, for example), but others are – giving employees disposable income and leading to a discernible spin-off of cash into other Liverpool businesses.

Risks if EU money is not replaced

Jobs, literally, can be the difference between life and death. EU programmes cannot deal with the total defects of the economy. But the fact is that the money from those programmes has been fundamental to regeneration programmes across the UK and will be extremely hard to replace.

Following the accession of many states to the EU since 2004, the amount of money available to regional funds in the UK has dropped considerably, but the EU still provides some chunky grants. Between 2013 and 2020 the two major European Funds – the European Social Fund (ESF)[2] and the European Regional Development Fund (ERDF)[3] – will have put almost £11bn into the economies of the poorest areas in the UK. The North West’s share of this is £1.1bn, and the Liverpool City Region’s share is about £150m.

But that is not all. This funding must be matched by the private or public sector. Currently, 30 major projects across both the public and private sectors in the Liverpool City Region are being financed by EU funding. Perhaps some of the ‘matching’ money will continue to flow without the European element. However, cross-government support will be needed to make sure equitable funding is made available across the UK, particularly in places where it isn’t at the moment (for example, transport spending per capita is four times higher in London and the South East than it is in the North West). Given the funding promises made to farmers, universities and other sectors in the UK, there simply will not be enough cash left for the wider uses to which EU money is currently put.

Priorities for the UK

The top three priorities in Liverpool (and similar cities) are jobs, jobs and jobs. Indirectly, a strong economy provides these regions with the taxes to pay for much needed services. Directly, and in the context of health and social care, a much-improved health environment. There are so many ways places like Liverpool will not expand as quickly without the continued membership of the EU. The city’s port is dependent on breaking up big loads crossing the oceans and being split there for onward delivery to mainland Europe. This may not happen if the UK is outside the customs union and single market. The country’s universities depend on Europe-wide cooperation in research. If the UK is outside the EU, the money may not flow in the same way and the country’s universities could be excluded from cross-border research programmes. These losses of opportunity could have a direct and adverse effect on all health indicators.

There is disparity between spending on cultural organisations in London and the South East, and those in the North West. This disparity also occurs in infrastructure, research and across many other sectors. The EU’s money has always been closely based on an objective assessment of need, whereas the UK government’s assessment under any political party has closer reflected political considerations. If EU funding is to be removed, it must be replaced using a transparent mechanism for ranking need and opportunity. The UK has a great opportunity to create national policies to address poverty, and perhaps to go even further by developing more aggressive policies to encourage the creation of wealth across the country, and with it improve the nation’s health.

[1] These were areas identified by the 2000–06 EU Objective 1 programme. The programme supported the development of regions that were significantly falling behind the rest of Europe.

[2] The ESF supports worker adaptation (for example, retraining of workers from declining industries), employment and integration.

[3] The EDRF finances direct aid to companies to create sustainable jobs, infrastructure development, financial instruments (for example, local development funds) and technical assistance.”

About richardkemp

Leader of the Liberal Democrats in Liverpool. Deputy Chair and Lib Dem Spokesperson on the LGA Community Wellbeing Board. Married to the lovely Cllr Erica Kemp CBE with three children and four grandchildren.
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