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LGA calls on government to replace EIB funding after Brexit

Councils have called on ministers to find ways to match investment by the European Investment Bank (EIB) in housing and infrastructure projects after Brexit.

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LGA calls on government to replace EIB funding after Brexit #ukhousing

The Local Government Association (LGA) warned that the loss of EIB funding after Britain leaves the EU could stymie affordable housing development.

The EIB has been a significant funder for the social housing sector in recent years, including a £1bn loan for The Housing Finance Corporation’s Affordable Housing Finance programme, which is expected to build 20,000 homes across the UK.

But the bank warned before the EU referendum it would “not be feasible” to continue with the same levels of investment if the country opted to leave.

Under the current draft Brexit agreement between the UK and the EU, the UK will no longer be eligible for EIB funding from the beginning of the transition period next year.


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Existing projects should continue, but some deals already in the pipeline have reportedly stalled.

In August, housing associations in Wales began seeking alternatives for a finance vehicle worth up to £420m after talks with the EIB fell through.

UK organisations have finalised 39 deals worth just under €3.1bn with the EIB since the EU referendum in June 2016, compared with 74 deals worth €13.5bn in the preceding 18 months.

Kevin Bentley, chair of the LGA’s Brexit taskforce and deputy leader of Essex County Council, said: “Losing access to cheap long-term financing from the European Investment Bank that supports vital investment in our communities is one aspect [of Brexit] that needs to be addressed.

“Major affordable housing developments and large infrastructure projects, as well as smaller investments and SMEs, have benefitted enormously from this access.

“Councils are raising legitimate concerns that losing this funding source could result in a reduction of housing developments, council tax receipts and overall revenue of councils that is used to fund essential services.”

Government must “provide immediate assurances that equivalent lending alternatives will be made available” after Britain leaves the EU, he added.

The EIB typically offers a cheaper long-term source of finance than is available from many private funders.

The UK has been the fifth-largest recipient of EIB funding.

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