Brexit: Impact on EU Funding

Oral Answers to Questions — Finance – in the Northern Ireland Assembly at 2:45 pm on 18th October 2021.

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Photo of Andrew Muir Andrew Muir Alliance 2:45 pm, 18th October 2021

1. Mr Muir asked the Minister of Finance for his assessment of the impact of Brexit on the level of funding received from the European Union. (AQO 2593/17-22)

Photo of Conor Murphy Conor Murphy Sinn Féin

The impact of Brexit on funding has not been positive. We will no longer have access to programmes such as the European social fund (ESF) and the European regional development fund (ERDF) and to competitive programmes such as the Connecting Europe Facility (CEF). In its 2017 manifesto, the Conservative Party promised full replacement of EU structural funds via the Shared Prosperity Fund (SPF). We have, however, been excluded from the policy development and design of that fund, which is likely to be delivered centrally by Whitehall, bypassing the Executive. The result is an annual loss of £70 million to the Executive's spending power. Agricultural support of £315·6 million has been agreed for 2021-22. Treasury will, however, deduct from that the receipts that we will get from current programmes. That deduction is estimated at £34 million over the next three years, which I consider money lost.

On a more positive note, Brexit has not impacted on the PEACE PLUS programme, which is due to have a fund of some €1·1 billion over the next seven years. That is approximately double the total allocation to the 2014-2020 Peace IV and INTERREG programmes.

Photo of Andrew Muir Andrew Muir Alliance

I thank the Minister for his response. An area of real concern for me is the European social fund support, which has helped a significant number of organisations across Northern Ireland. What work is being done to mitigate the impact of the loss of that funding? Will he meet the NOW Group, which operates in my constituency and other areas to provide valuable support funded through the ESF?

Photo of Conor Murphy Conor Murphy Sinn Féin

We have had numerous engagements, particularly with people in social enterprise, who provide a valuable service not only by creating businesses but by ensuring that people who perhaps do not have access to employment or who need other supports can get support through them to find work and develop skills. They perform a hugely valuable service.

Of course, its replacement, the Community Renewal Fund (CRF), and other funds, such as the Shared Prosperity Fund, are, as I said, operated directly from Whitehall. While there may be an opportunity for such groups to bid into them, we are unable to prioritise or match the funding to the Executive's priorities. There is really an element of chance involved in whether groups will get funding through them. Some Departments have been asked for a high-level view on whether some of the applications match their priorities, but we do not have any sense of what value that would have and whether it would ensure that they get the funding or, indeed, the reverse. If we say that it does not match our priorities, are we denying a project funding that does not come back into our coffers to be distributed against our funding priorities?

It is an unsatisfactory issue. We have continually raised it with Treasury. I was there last week with the Scottish and Welsh Finance Ministers, and we pressed the Chief Secretary to the Treasury on the dissatisfaction of the devolved areas in their entirety with how that funding operates. Those groups are left to compete with other groups from England, Scotland and Wales, and the Executive have little or no influence over the distribution of that money to very valuable projects that are deserving of support.

Photo of Jemma Dolan Jemma Dolan Sinn Féin

Peace funding has been valuable to community groups not only in my constituency but across the North. Will there be a reduction in the administrative burden on small community groups applying to the PEACE PLUS programme?

Photo of Conor Murphy Conor Murphy Sinn Féin

I am pleased that the programme got the necessary approval of the North/South Ministerial Council last week, albeit not in the meeting that it was intended to go to; nonetheless, it is important. We have had many discussions with the Special EU Programmes Body (SEUPB) and the Department in the South and with the community and voluntary sector and others who apply for Peace funding about their experience over the years and the difficulty in accessing funding.

There is a strong push on the new programme to make sure that it is more accessible and less bureaucratic. Economists from our Department have advised SEUPB on that. It has had strong input from the community and voluntary sectors and others, and it has assured us that it is listening to that feedback, so I expect to see a much more streamlined and accessible approach for funding applications.

Photo of Matthew O'Toole Matthew O'Toole Social Democratic and Labour Party

The Minister mentioned economists from his Department. A lot of what has happened, particularly since January of this year, has been a result of either a lack of information or faulty information. I ask the Minister to commit, as part of the Budget exercise that we are all expecting in the run-up to the election next year, to getting people in his Department, working with the Economy Department if necessary — I am coming to my question, Mr Deputy Speaker — properly to map the costs of Brexit to the economy, including lost ESF and structural funding and the potential economic benefits of unique dual-market access. I ask the Minister and the economists in his Department to undertake and publish that work ahead of next year.

Photo of Conor Murphy Conor Murphy Sinn Féin

That would require strong input from the Department for the Economy. The Member may know that I and Executive colleagues, including his colleague, previously asked that the Department for the Economy put forward a prospectus on the benefits of having one foot in the British markets and one foot in the European markets. As yet, we have not received anything.

I am happy to do whatever mapping and information gathering we can in the time ahead, but I cannot vouch for the Department for the Economy in that regard. It is incumbent on us to give a clear picture of the funding that has been lost and the opportunities that still arise.

Photo of Jim Allister Jim Allister Traditional Unionist Voice

Despite his and his party's doom and gloom predictions, does the Minister acknowledge that direct payments to farmers in Northern Ireland have increased significantly post Brexit? On this very day, £301 million is going out in direct payments, with more to follow, compared with a total of £281 million in the last year of common agricultural policy payments.

Does the Minister acknowledge that there is one restraint on agricultural aid and that is the limit in the protocol on the amount that can be granted? Does the Minister support the protocol cap on agriculture?

Photo of Roy Beggs Roy Beggs UUP

There is a number of questions there. Minister.

Photo of Conor Murphy Conor Murphy Sinn Féin

"Clutching at straws" comes to mind, given the complete chaos that Brexit has been in Britain and, potentially, here. The fact that we have the protocol arrangements has in some way insulated us against that, and that makes it all the more incumbent on us to get a sensible arrangement between the British Government and the European Union.

Some £315·6 million in agricultural support has been agreed for 2021-22, but the Treasury will deduct from that the receipts we get from the current programme. We previously had the ability to carry those over into future funding for agriculture. We estimate that £34 million will be lost over the next three years.