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Issues and Challenges for Councils

Leaving the European Union

In 2016, 52.5% of voters in Wales supported the UK’s exit from the European Union. The UK left the EU at 11pm on 31st Jan 2020. A transition period followed until 31st Dec 2020 when the UK formally left the European Single Market and Customs Union.

Exiting the Union will continue to have a profound effect on the public, public services and councils for many years. There will be EU transition co-ordinators in place in each council until the end of 2022. These are some examples of the changes that councils are facing.

1. Economic Development

Wales has benefited considerably over the last 20 years from many European funding programmes. On leaving the EU, Wales lost access to the funding programmes which provided significant levels of funding for economic development, regeneration, skills and employment and rural development activities.

The spend and delivery of current EU funded programmes continues until the end of 2023.

Apart from the funding itself, Wales operated within an overall EU policy, strategy and legislative framework which guided and governed the delivery and implementation of all the funding programmes. When in the EU, Councils were able to shape the development and design of the programmes and were involved in their management at a Wales level via the Programme Monitoring Committee.

The planning and preparation for replacement EU funding continues to be a key feature of work in ensuring availability of funding for communities across Wales to address the challenges facing local economies, compounded by the Covid-19 crisis.

Local Government, working with the Welsh Government and key partners from the wider public, private and third sectors, developed a Framework for Regional Investment for Wales published in November 2020, to guide replacement EU funding for Wales.

2. The Law

Changes to the law on for example procurement and state aid.

3. The Workforce

Changes to the free movement of labour and the impact on pension funds.

4. Services

  • Possible delays to delivery and increased prices of imported goods and food.
  • More pressure on Trading Standards departments who are responsible for example for product safety and Environmental Health departments who are responsible for example for export health certificates.
  • Any outsourced services may be affected.

5. Community Leadership

Councils are:

  • Working with local business to assess and address economic impacts on businesses and to understand the new rules affecting, for example, trade and product standards.
  • Working with the agricultural sector to deal with changes in direct support and rural development funding.
  • Responding to the economic impact on communities and residents.

    Impacts

    Here are some examples of the impacts on people’s lives as a result of the UK no longer being in the European Single Market and the Customs Union. Councillors will find it useful to know both how the council can help and the limits of the council’s power.

    More information can be found here: Brexit Transition Support Programme for Welsh Local Authorities

    The impact of no longer being in European Single Market/Customs Union on:

    N

    What can the council do?

    M

    Things the council can’t do

    Goods and services (including product standards)

    N
    • Trading Standards have a role in upholding product standards/safety
    • The UKCA (UK Conformity Assessed) marking is a new UK product marking that is used for certain goods being placed on the market in Great Britain (England, Wales and Scotland) – see Using the UKCA marking. It covers most goods which previously required the CE marking
    M
    • Allow products to be sold locally that do not carry required safety markings

    Prices (affected by delays; increased paperwork; new VAT arrangements)

    N
    • Work with its own supply chain to improve resilience of supply (including local purchasing)
    M
    • Avoid checks and increased border controls on goods it imports from the EU (e.g. food and construction material)

    Freedom of movement / ability to travel / immigration

    N
    M
    • Recruit EU citizens if they don’t have Settled Status

    Impact on jobs and training

    N
    • Support local businesses in navigating new rules and regulations and signposting to advice (e.g. Business Wales – Brexit portal.)
    • Seek to attract and develop new job and training opportunities
    • Support those impacted by losing jobs, becoming unemployed; suffering poverty
    M
    • Bid for EU funds any more

    Entitlement to benefits: requirement of EU citizens to have Settled Status (affects eligibility for services etc)

    N
    M
    • Provide Housing Benefits to EU citizens who have not received Settled Status

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