Brexit trade deal risks being ‘generic’ and ‘possibly unworkable’ without local government input

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A UK trade deal with Europe could be “unworkable” unless the government starts talking to councils about impacts on local economies, a leading academic has told MPs.

Prof Amelia Hadfield, director at the Centre for European Studies, Canterbury Christ Church University, called for local authorities to be given a bigger voice in discussions of any future deal with the European Union.

Central government departments such as the Home Office, DEFRA and DeXEU are not currently engaging with the sector, the local government select committee has heard.

Hadfield said that, during her research into the impact of Brexit, “the main sense that I got was that local authorities are simply not part of the Brexit conversation”.

She said that national government had yet to create a structure where local and regional voices are able to feed into central government preparations for Brexit.

“Regionalities, spatialities, local sectors, even the local labour market, which is worlds away from what the national perspective is, are simply not being brought in,” she said.

On future trade talks, she said: “Without that [local] reading you are going to wind up with a rather generic, thin and quite possibly unworkable trade deal that is British in appearance but not fit for purpose in Britain itself because you fail to engage with the regions beneath.”

Tony Travers, director of the institute of public affairs at the London School of Economics, said: “When trade deals are being negotiated they will impact differently on different parts of the country. These impacts need to be understood when deals are being done.”

Also giving evidence to the committee, CIPFA chief executive Rob Whiteman agreed that it is currently difficult for local government to get its voice on Brexit heard in Whitehall.

He added: “I think it is at an early stage, but my experience of government is that it is incredibly stretched. In fairness, I am not sure they have much bandwidth to think.”

Whiteman said that the government has time to get right the shape of a future structure to distribute regional funding following the UK’s departure from the European Union.

“I don’t think we should look upon transition to new arrangements as a two-year issue before we leave the EU.

“This is probably an issue you should look at for the next decade because the government will make some transitional arrangements and probably keep the type of system we have had in place [for that period].”

However, councillor Kevin Bentley, chairman of the Local Government Association’s Brexit task and finish group, told the committee that councils are increasingly worried  over future funding arrangements.

He said: “More clarity is urgently needed. The very nature of local government means we are very close to the residents we serve so this is about people, their jobs, their family and it is hugely important.

“We are certainly talking to the Government about this funding and the critical timeline on the funding.”

Whiteman said that he supported the introduction of a shared prosperity fund, but said thinking was needed on how the government distributes the money currently allocated by the EU.

He said: “Traditionally, for example, the EU structural funds have been allocated based on GDP. The government will probably want to look at some regional needs analysis.

“If it is doing that, it may need to look at some other funds that are being distributed. For example, how would that square with Barnett, which is distributed on a population basis?”

In a statement on the issue, Paul Dossett, head of local government at accountancy firm Grant Thornton UK, said: “The loss of EU funding after 2020 will affect all councils and places.

“EU funds have been a crucial lifeline for regional economic development projects so it is vitally important that the different levels of exposure at local authority level are both understood and represented.”