By Daniel Hunter

Vital European Union (EU) funds are being taken away from English councils and their business partners in a blow to local growth projects.

The Local Government Association (LGA) has warned that the Government's announcement on how it distributes money across the United Kingdom will stall innovative community projects and slow down economic recovery in England.

The Department for Business and Innovation and Skills has announced how the UK's EU Structural Funds for 2014-2020 would be re-allocated across England, Northern Ireland, Scotland and Wales.

The result is that England will receive £784 million (11 per cent) less from the UK's allocation than outlined by the EU in February, with their UK counterparts sharing this money between them.

Northern Ireland will receive £181 million (66 per cent) more in funding than outlined in the EU Budget, Scotland will get an extra £228 million (40 per cent more) and Wales will see their allocation rise by £375 million (22 per cent more).

The Government claims it has taken the funding decision to minimise the impact on devolved administrations of the new EU formula for allocating funds agreed in February, although the EU is still to agree the move.

But it is a huge blow to English towns and cities, whose projects will now lose out on essential EU funds that are crucial to help boost local growth, create jobs and speed up the economic recovery.

And the LGA believes this highlights the urgent need for local authorities to be given more devolved funding powers and responsibilities to help local areas plug the funding gap by making the most of their diminished resources.

Sir Merrick Cockell, LGA Chairman, said: "This will be a huge disappointment for English local authorities and their local enterprise partnerships at a time when they have to increasingly rely on EU funds.

"Local areas are better placed than Whitehall to understand their own unique economic, social and demographic needs but desperately need the resources and powers to be able to drive local growth.

"This funding announcement means it is even more important for the Government to follow through with a more devolved approach to funding and to fully commit to Local Growth Deals and Heseltine's proposals for a single pot to reflect local needs.

"People in Scotland, Wales and Northern Ireland already have a much greater say over everything from health to transport, yet larger cities and counties in England are still battling for the same freedoms to tackle their local priorities.

"Giving more power to local councils over funding and greater responsibility for growth and infrastructure is vital if communities in England are to be offered the same opportunities as the rest of the UK to help local areas invest in projects that will drive growth and get the economy going again."

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