Brexit, EU Area-based Policies, and the Devolved Governments

Reports & Briefings
David Bell

Since the EU referendum, the post-Brexit future for agricultural, regional and rural policies in the UK have been hotly debated. Few of these debates have taken account of the role of the devolved governments in relation to these policies. Although agriculture, regional and rural policy have been heavily influenced by the EU for decades, the devolved governments have played an important role in their development and administration. Repatriating the policies to the UK will pose many political and economic challenges. This paper discusses alternative futures for these policies, taking into account the potential role of the devolved governments. There is little doubt that decisions over their future will affect the relationship between the UK government in Westminster and the devolved governments in Scotland, Wales and Northern Ireland.

Clearly, the UK government is the prime actor in decisions over policy repatriation. It is about to embark on negotiations with the EU which will result in the withdrawal of the UK from these area-based  policies - policies that are linked to specific locations within the UK, such as those dealing with agriculture, regional and rural issues. It will soon be negotiating trade deals with the EU and with other countries. It must decide how it will treat issues such as agricultural support in these negotiations. Agriculture is often a difficult issue in trade negotiations. Changes to agricultural tariffs and income support mechanisms will also affect the budgets of the devolved governments. They will wish to have a significant influence on the U.K.’s negotiating stance in relation to these policies, since the outcomes from trade negotiations may affect their competences.  

Continuation of area-based policies along the same, or similar, lines to the present structure is not guaranteed. Some argue that existing EU regional and rural policies do not provide value for money anyway and have consistently failed to achieve their objectives, such as reducing spatial inequality or increasing national growth. If the UK government accepts such arguments and redirects funding to other priorities conflict with the devolved governments is inevitable.

Even if the UK government decides to continue with area-based policies, important decisions must be made about the allocation of responsibility for their design, administration and evaluation. These will involve the UK government and the devolved governments since a significant proportion of the EU funding is already administered by the devolved governments. Conflicts around these decisions have the potential to disrupt the relationship between different levels of government within the UK.

To motivate the discussion, and to get an idea of the resources involved, we begin by considering the most recent EU budget which shows the magnitude of EU-funded, area-based policies in the UK. In the following section, we examine the choices that the UK Government and devolved governments might make once these financial flows from the EU come to a halt. The final section concludes.