SCOTLAND will suffer a “devastating blow” if crucial EU funding is not replaced after Brexit, it has been warned.

EU Structural Funds – which aim to promote jobs and growth across Europe’s regions, with more cash funnelled into poorer areas – are worth £1.3bn a year to the UK.

Between 2014 and 2020, around £800 million is set to be pumped into Scotland to help reduce regional disparities in income, wealth and opportunities.

But Professor Steve Fothergill, national director of the Industrial Communities Alliance, has now warned that if this cash is not replaced, “there would be a devastating blow to economic development efforts in Scotland”.

The academic said domestic UK and Scottish spending on regional policy had declined over the years, making the EU cash – which bankrolls a number of projects, from infrastructure to training and skills development – vital.

In a written submission to Holyrood’s economy committee, he said: “The projects vary greatly in size and in geographical coverage.

“It is reasonable to assume that in the absence of EU funding hardly any of the projects would have proceeded on the same scale if at all.”

UK ministers have pledged to create a UK Shared Prosperity Fund to replace the EU cash after Brexit, but have yet to provide any detail.

Mr Fothergill said this replacement fund would need to be in place by the end of 2020 to ensure “there is no damaging hiatus in funding”.

He said: “Beyond the end of 2020 it will not be possible to make new EU-funded commitments even though actual spending on EU-funded projects will continue for up to a further three years.”

However he insisted there was “plenty of money” available for the fund, with the Office for Budget Responsibility identifying more than £13bn a year that will eventually no longer be paid over to the EU after Brexit.