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Delight as Devon looks set to receive a bigger share of EU funding

By GRichardson  |  Posted: February 12, 2013

John Hart

John Hart

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Exeter is in line to receive a bigger share of European funding to boost the economy and create jobs in a budget deal with Brussels.

Prime Minister David Cameron has announced that Exeter and the rest of Devon will qualify for a larger allocation of EU cash than is currently the case.

It follows the creation of a new funding tier for 11 so-called "transition regions", including Devon, which could be in line to share a total of £2.6 billion over the period 2014-20.

Under the existing system Devon loses as it falls into the same category as much more affluent areas such as inner London and Brussels.

Grant aid based on the comparative poverty of each region judged by their gross domestic product or GDP.

Cornwall's GDP is 73 per cent of the European average which is below the 75 per cent qualifying rate for the highest EU assistance.

Devon's GDP, including Plymouth and Torbay, is 88 per cent of the European average, which means it gets the same funding per head as Brussels and inner London which has a GDP of 327 per cent.

It means on one side of the Tamar, in Cornwall, European aid is currently worth £1,120 a head, compared to £118 - about 10 per cent - in Devon.

There are concerns it will mean businesses choosing to set up in Cornwall based on the disparity in European aid.

This is despite parts of Devon such as the South Hams, East Devon and Torbay having lower average weekly earnings than Cornwall.

The revamped system creates a third tier of 'transition' areas with GDP between 75 per cent and 90 per cent of the European average.

These would receive bigger share of structural funding than they would have if classified as a more developed region.

The proportion of Euro cash that can be used for a project is also higher at 60 per cent rather than 50 per cent, lowering the need for domestic match funding.

The new category will help overcome the 'cliff-edge' effect where there is a sudden difference in levels of support at administrative boundaries, such as the River Tamar.

Hailing the EU budget deal in the Commons following last week's summit, Mr Cameron told MPs: "I can confirm that Britain will benefit in terms of transition regions."

Devon was among those set to benefit, he said.

Devon County Council leader John Hart said: "We have been campaigning strongly for this with the support of our MPs and I am delighted that the Prime Minister has recognised the justice of our case.

"We don't yet know what the budget will be but it should mean Devon will be eligible for a bigger proportion of European funds for major projects designed to boost the economy and create jobs.

"If Devon can secure greater European subsidy, then our key economic growth projects stand a greater chance of going ahead.

"What we want to do is create the climate for our economy to grow and support the private sector in delivering high-value, added growth through investment in infrastructure, including digital infrastructure, research and development, innovation and skills.

"It's early days yet but I am cautiously optimistic this is very good news for the Devon economy and the prosperity of our residents.

"We've worked very hard with our partners to make this case and we will be liaising closely with the Local Enterprise Partnership which will play a key role in managing European funds after 2014."

Lib Dem South West MEP Graham Watson said: "Extra European money for Devon will bring new jobs, will bring economic growth and will provide the funding needed to expand our skills base in the Westcountry."

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