Brexit: £14m-a-year in EU funding is lost to Scottish rural areas

That is the warning from the Scottish LEADER programme, the key Scottish rural development initiative which has distributed £82m of EU funding between 2014 and 2020. That is in return for projects coming up with £68m matched funding.

They say it has aided some 1,034 projects and over 2.25 million people.

A replacement Shared Prosperity Fund was proposed as an alternative by the Scottish Government. But the programme says that was "rejected" and in its place is a £220 million pilot scheme for the whole UK expected in in 2021-22.

The intention was that the fund when started will be worth an average of about £1.5bn a year across the UK – but might not be available until 2022 with many saying the funds will be "significantly less" than the EU schemes.

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The Scottish Government said: "It is unacceptable that the UK Government has not yet provided this.”

Acting programme co-ordinator at Tyne Esk LEADER, Angela Lamont, said:"The funding is absolutely critical for rural areas and the prospect of losing the volume of funding next April will be catastrophic for the organisations affected.

“Not only does it allow businesses, third sector organisations and community groups much needed funding, it also acts as a lynch pin for other investors to pitch in which can amount to more than what LEADER contributes.

For the £2.42 million we’ve invested, the match funding has been £3.49 million, or for every £1 invested it’s £1.44 attracted in.

“Through our work we have been able to create new jobs, increase tourism numbers and provide important local infrastructure.”

She said she was worried the Westminster proposed alternative will not be enough for businesses who require more funding.

She said: “The pilot year planned is going to be extremely difficult for a number of businesses, and some may fold because of it.

“Combined with the desolation of the Covid-19 pandemic, businesses need all the help they can get and this withdrawal of funding will hit them twice as hard.

“The fear is this new pilot scheme will take a lot of time to set up, and with the anticipation this level of funding will be divided throughout the UK, instead of Scotland it may be too much for some businesses to cope.”

One area that has previously benefitted is Tyne Esk, which has invested more than £3.4 million in funding for its target communities in rural East Lothian and Midlothian over the six year programme.

The Tyne Esk LEADER has contributed to the creation of 62 new jobs across the two regions helping 42 different rural organisations over the six year period.

It has provided grants of up to £200,000 for projects.

One benefactor of the funding was Cousland Smiddy (below) near Dalkeith, Midlothian, an early 18th century blacksmith’s shop still in operation today.

The smiddy required parts of the premises to be renovated, and in conjunction with Historic Environment Scotland [HES], LEADER was able to provide £20,000 of funding for the historic building which has had a working blacksmith since 1703.

Sheena Irving, Chair of Cousland Smiddy Trust, said: “Receiving funding and project support from Tyne Esk LEADER enabled us to gain match funding from Historic Environment Scotland and the essential permissions for the listed building works to be carried out.

“The final result allows the smiddy to continue as a working space for the tenant farrier as well as being easily accessible and safe for all visitors to experience the craft demonstrated in its authentic setting. Delighted with the results.

“Had it not been for the match funding and combined efforts of HES and the LEADER scheme this restoration would not have been undertaken, and it is relatively small projects like ours which will suffer most from the lack of funding.”

The programme also helped establishe decent internet connectivity to a remote Scottish community deprived of it for years.

Broadband speeds in the Stirlingshire village of Balquhidder were able to reach 1gbps after residents took it upon themselves to dig the necessary holes and lay fibre cables and then sought support from the likes of the LEADER programme.

Each programme is a six year process, with the latest coming to an end in April 2021.

The new programme will come to an end in April 2021, with all projects to be completed in line with the closure by the end of 2020.

A Scottish Government spokesman said: “LEADER has been one of the real benefits of EU membership for Scotland. It has helped to deliver community led local development which is a key component in creating thriving, resilient rural and island communities.

“We have been clear and consistent in our position with the UK Government that we expect full replacement of EU funds to ensure no detriment to Scotland’s finances, and we expect the UK Government to fully respect the devolution settlement in any future arrangement. We share these concerns from the programme co-ordinator at Tyne Esk LEADER.

"To help support recovery from COVID-19, mitigate the impacts of Brexit and maximise future opportunities for rural development we need clarity and certainty on replacement funding for all EU structural funds now – and for that funding to be devolved in full to Scotland. "

A UK Government spokesperson said: “The Shared Prosperity Fund will bind together the whole of the UK while tackling inequality and deprivation across all four nations.

“For the first time in decades, we have a chance to do things differently and target our investment where it is needed most, investing in people, communities and businesses to level up the whole of the UK.

“People in every nation and region want to see politicians working together on the common challenges we all face and we will continue to work closely with the devolved administration in Scotland as we develop the fund.”