Just 48 per cent of the £3.1 billion that the UK has been allocated of the fund has been claimed, five years into the seven-year spending period. With just £1.5 billion allocated, £1.6 billion is left to spend and, if the current pace of allocation was to continue, £914.5 million risks being sent back to Brussels.
Cllr Kevin Bentley, Chairman of the LGA’S Brexit Taskforce, said: “The current situation with the European Social Fund is leaving local areas facing huge financial shortfalls, as a result of a lack of investment.
“This funding has been used by local areas to create jobs, support small and medium enterprises, deliver skills training and invest in critical transport and digital infrastructure and boost inclusive growth across the country.
“To help ensure we have an economy fit for the future, we urge the Government to act urgently to ensure that local communities are getting the investment they desperately need, as well as learn from this experience in developing the UK Shared Prosperity Fund.
“Without action, there is a risk that nearly a billion pounds of investment into our communities will be lost and local areas and economies will be denied desperately
A spokeswoman for the Department for Work and Pensions said: “There is an agreement that funding can continue beyond 2020 as long as the application is received before then. There is a huge amount of interest in the European Social Fund and there are more and more applications coming in. There is no issue with the ability of the department to process those applications.”