Government funding to support the economy in Warwickshire is expected to be around a third less than what was available from the European Union.

A report laying out what the area would receive from the UK Shared Prosperity Fund (UKSPF), which replaces the EU's European Structural and Investment Funds (ESIF), warned that "support for the Warwickshire economy faces the triple challenge of a significant reduction in support, likely gaps in support and a loss of delivery capacity". 

ESIF funds some of the council's activities in business support and employability and skills but most of the programmes that it pays for are due to end in June. 

UKSPF's priorities are communities and place, supporting local business and people and skills but "the majority" of the £20.17 million committed over the next three years is not available until the final financial year of the cycle starting in April 2024.

The report, authored by Matthew Epps, lead commissioner for business and economy, at Warwickshire County Council, detailed the issues. 

"It is difficult to make exact comparisons between the ESIF funds and UKSPF due to the scope and timing of the new funding," it read.

"UKSPF funding can support a wider range of activities than ESIF funds which were focused on economic growth and support for business as well as employment and skills, the amount allocated to each local area also increases each year between 2022-2023 and 2024-2025, and the ESIF programmes themselves have been closing at different points from June 2021 up to December 2023. 

"However, £20.1 million over three years – or an average of £6.7 million a year – represents an estimated 30 per cent reduction on the ESIF funds that have been available in Warwickshire. The removal of the previous ESIF requirement for 50 per cent match funding is also likely to see a significant reduction in the total investment."

District and borough councils are set to spend the money, collectively allocating £5.12 million to supporting local business priority and £3.1 million to people and skills so far. 

Mr Epps's report adds: "There are particular reductions in the amounts available to support business growth, innovation and low carbon support.

"It is estimated that the total amount available over the next two years represents a 75 per cent reduction on the amount previously available via the ESIF funds over a typical two-year period. 

"There is also a significant reduction in the amount available for employment and skills with a particular reduction in support for the long-term unemployed in the second half of 2023-2024 when current ESIF funded programmes close and before new UKSPF activities were originally able to start."

Cllr Martin Watson, portfolio holder for the economy, did not address the cuts when presenting the paper to his county cabinet colleagues this week, introducing six county-wide priorities to spend the funds on – start-ups, business resilience and growth, high growth and innovation, net zero, manufacturing and tourism, leisure and hospitality.

"Over past years it has provided significant investment to us and will continue to provide some investment," he said. 

"The government has recommended that even though it is giving the money to districts and boroughs, there is very much a collaborative approach to how this is managed and run, particularly between neighbouring areas."