A NEW "UK Shared Prosperity Fund" will make up for the regional grants lost when Britain leaves the EU, Conservatives have promised.

The fund appears as a pledge in the Conservative manifesto. This morning in York Chancellor Philip Hammond said it replace the funds lost when Britain leaves the EU, but would be more efficient and would be targeted at the UK's priorities.

On a visit to a city-based tech business, Mr Hammond said: "The idea here is to create a fund which will allow us to target strategic challenges across the UK, and specifically to deal with the disparities in economic development, growth and prosperity across the country.

"We will create this prosperity fund which will take the released money which would have been our subcriptions to the EU which would have come back to us through structural funding."

The cash available will equal that which would have been available to Britain through EU funds, but the Chancellor said he couldn't commit to providing more than that.

But there will be an "efficiency gain", he said, meaning more money will get to through to the front line.

"The way the EU distributes money, unsurprisingly, is highly bureaucratic – multi tiers of governance - so we think we can do it much more efficiently and effectively from doing it within the UK.

"It will allow us to plan around UK priorities rather than EU decided priorities."