Council leaders say the Government is dragging its heels over a promise to replace billions of pounds of European funding after Brexit.
Some €10.5bn of European Union structural and investment funds have been allocated to local authorities for spending between 2014 and 2020 on a wide range of projects, including business support, job creation and infrastructure.
But the Local Government Association says the Government has given “scarce detail” about how it intends to implement a manifesto commitment to provide a UK shared prosperity fund to replace the money when Britain leaves the EU.
The cash is targeted mostly at areas of need, with Cornwall and West Wales receiving more than £800 per person, while the Scottish Highlands and parts of North East England get around £300 per person.
In Redcar, which has some of the worst deprivation in the country, civil engineer Rob Lynas was given help from the funding to set up a small business after being made redundant.
He now employs three staff and says the 12 hours of free business advice he was given, along with access to a cheap start-up loan, was vital to the firm’s success.
Image: Rob Lynas says the support he received was vital to his firm’s success
He told Sky News: “It helped us to get the wheels in motion for setting up the business – business plans, helping us with arranging finance.”
Mr Lynas added: “We got some finance at a more favourable rate because banks weren’t interested in start-ups at that point.
“It allowed us to invest in some really good IT and move into this office, and get our desks and chairs. I think everything would have been a lot slower without it.
“It was very worthwhile. It made a massive difference, giving us some confidence that we were going in the right direction.”
Councillor Kevin Bentley, chairman of the LGA’s Brexit Task and Finish Group, said the future of EU regeneration funding is vital for local authorities.
“Councils have used EU funds to help new businesses start up, create thousands of new jobs, roll out broadband and build new roads and bridges,” he said.
“To further its devolution commitments, we want to work with the Government to help develop a fully-funded and locally-driven successor scheme.”