There could be a funding gap of up to half a billion pounds in the London employment economy after Brexit, councils have warned.

London Councils, the local government association for all local authorities in the capital, said the future of skills, employment and growth projects is “worryingly uncertain”.

At the moment, many borough-run projects to increase employment and training opportunities in London are funded by European Structural and Investment Funds (ESIF).

Between 2014 and 2020, £160 million from the European Regional Development Fund (ERDF) and £420 million from the European Social Fund was pledged to increase employment skills in London.

But after Brexit, central government will need to find a way of plugging that financial gap once the European funds dry up.

Central government plans to replace this funding with the UK Shared Prosperity Fund but the details of what this funding will be used for and how it will be shared out are not yet clear. A consultation on the issue has been postponed.

London boroughs fear a reduction in this funding will have a negative impact on apprenticeship creation, employment and training opportunities and economic growth in the city.

Cllr Clare Coghill, Waltham Forest Council leader and London Councils’ executive member for business, Europe and good growth, said: “It remains worryingly unclear how central government plans to replace European funding schemes post Brexit. A consultation on the new funding, promised last year, has now been postponed.

“London boroughs will continue to support and empower local communities during the UK’s exit from the EU, but our resources are limited as we have sustained heavy funding reductions over the past decade.

“It is right that central government takes the initiative and provides the certainty needed to support communities and business after we leave the EU.

“It is also important that councils have the opportunity to influence how funding will work as it will ultimately be invested at a local level. We believe it must deliver the same amount of funding as current schemes with control fully devolved to local areas.”

Securing post-Brexit funding for the skills system in London is one of the London Councils’ pledges, which were agreed recently by London’s borough leaders and directly elected mayors.

This is the first time London Councils and its member boroughs have signed up to a series of shared commitments, which they aim to deliver over the next three years.