The Route to the UK Shared Prosperity Fund: Is it the Way Forward?

08 April 2021 - by Cris Cloyd

When the UK left the European Union, it left behind access to EU structural funding beyond 2020. Locally this is a loss of around £600 million per year. In the last few weeks, the UK Government launched its response - the UK Community Renewal Fund—a one-year pilot of distributing £220 million and which is meant to inform the design of the much-heralded UK Shared Prosperity Fund (SPF).

But will the right lessons be drawn from this pilot? Both in terms of local control and levels of funding?

Interestingly, the announcements around what the SPF will look like and how it is expected to operate has brought considerable consensus from local political parties, with most wishing to see the decisions come from local ministers and not Whitehall.  

Out of the gates first, SDLP Minister for Infrastructure Nichola Mallon MLA recently said that “devolution must be respected and decisions for local people must be made by local ministers.”

Alliance MP Stephen Farry addressed the topic during the Spring Alliance Party Conference saying that amongst many priorities he is engaging in, “fighting for the new Shared Prosperity Fund to be under local control” in one of them.  

The Finance Minister, Sinn Féin MLA Conor Murphy has also joined other devolved Ministers in jointly calling on the UK Government to begin engagement and to respect the devolved arrangements.

Alongside his counterparts, Murphy pointed to an apparent side-lining of efforts and requests by devolved administrations “to input to the development process for these funds for almost three years” and that the Government is “now using powers under the UK Internal Market Act to bypass us completely.”

The Ministers went on to say that the Government “is ignoring our respective devolution arrangements, delivering funding to meet Whitehall’s priorities rather than those of the people of Scotland, Wales and Northern Ireland.”

So, what do we know about the fund?

  • NI will have a slightly different approach to the rest of the UK to reflect the different governmental and political landscape
  • The application for NI applicants is due by noon on 18 June 2021
  • Funding decisions will be announced in July 2021
  • The investment priorities are:
    • Investment in Skills
    • Investment for local business
    • Investment in communities and place
    • Supporting people into employment
  • There will be pre-determined national allocations for NI, set at £11million
  • The Government is looking for innovative approaches, not duplications of current initiatives or processes
  • First tranche of funding will be released July 2021
  • Second tranche of funding will be delivered in Q1 2022

 A forward-thinking report from 2018 by the social change organisation, the Joseph Rowntree Foundation (JRF), called Designing a Shared Prosperity Fund recommended that:

  • The Government should commit to match the current level of EU structural Fund spending
  • Government should allocate money across the UK based on need, outside of the Barnett Formula
  • The fund should operate as a ‘single pot’, enabling capital and revenue streams to be coordinated

Critically, JRF also recommended that the funds should be allocated according to the employment rate and earnings of the least well off. In 2018 however, none of us could have predicted a pandemic to occur alongside the final stage of exiting the EU, and that the hurt would be felt by most acutely people who might otherwise have never thought they would need to rely on services such as those that will be replacing EU funding streams.

All of this shows how critical it will be that the UK Government gets the Shared Prosperity Fund right.

Further questions remain:

  • Will the SPF funds be enough to continue programmes and services already in place?
  • How will we leverage this funding for maximum impact?

Like every strategy and plan, we won’t know how effective it is until it hits the ground. Until then we continue to watch this space. 

More information about the Fund can be found here.