Report of an initial inquiry into the UK SHARED PROSPERITY FUND
November 2018
Why an APPG on Post-Brexit funding?
An All-Party Parliamentary Group (APPG) on Post-Brexit Funding for Nations, Regions and Local Areas was established in Westminster in June 2018. It is chaired by Stephen Kinnock MP (Lab) and its Vice-Chairs are Bill Grant MP (Con), Chris Stephens MP (SNP), Jo Platt MP (Lab) and Anna McMorrin MP (Lab).
The aim of the group is to help shape plans for the UK funding that is intended to replace the EU funding for national, regional and local economic development that will disappear following Brexit.
At its inaugural meeting the Group initiated an Inquiry to assess the views of stakeholders in the parts of the UK that currently benefit substantially from EU funding.
The aim was to produce a report that could be fed into government at an early stage to try to influence the UK government’s proposals, which were expected to be set out in a consultation in late 2018.
The issue is how will EU funds be replaced
The Conservative manifesto for the 2017 general election promised to set up a new UK Shared Prosperity Fund to replace the EU funds. The intention is that the new Fund will “reduce inequalities between communities across our four nations” and that the Fund will be “cheap to administer, low in bureaucracy and targeted where it is needed most”.
A written statement to Parliament from Secretary of State James Brokenshire MP, on 24 July 2018, confirmed the commitment to the new Fund but added little detail. Nearly everything about the Fund is still to be worked out leaving huge unresolved issues:
- How much funding will be available?
- How will it be divided up across the country?
- What activities will be eligible for support?
- Who will take the decisions about how the money is spent?The replacement for the EU funds is entirely a domestic UK matter. It does not depend on negotiations with Brussels. Nor does replacing EU funds necessarily require ‘new money’. In theory there is more than enough available to pay for the Shared Prosperity Fund from the funds that will no longer be paid over to the EU, though there are of course competing claims on this pot.
Who responded to the inquiry?
The APPG has received 80 submissions from an exceptionally wide range of organisations and locations. The list includes local authorities, Local Enterprise Partnerships, the TUC, Mayoral Combined Authorities, devolved administrations and others. Several of the submissions were made on behalf of large coalitions of partners, in the North East for example. The geographical spread includes responses from all four nations of the UK.
APPG recommendations
Overall budget
- The annual budget for the UK Shared Prosperity Fund should be no less, in real terms, than the EU and UK funding streams it replaces.
- The UK Shared Prosperity Fund should operate on the basis of multiannual financial allocations of the longest practicable duration.
- If other existing budget lines were to be included in the UK Shared Prosperity Fund the total budget of the new Fund should be increased by the full value of those additional budget lines, and the present rules on matching finance for projects should be adjusted accordingly.
Allocation across the country
- For the moment, the UK government should adopt a pragmatic approach and roll forward the four nations’ existing shares of EU funding into the UK Shared Prosperity Fund.
- the UK government should recognise that, within the framework of agreed guidelines, the allocation of the funding to local areas within the devolved nations should be a devolved matter.
- The UK government should deploys a robust formula, using up- to-date statistics, to allocate the UK Shared Prosperity Fund within England.
- If any element of competitive bidding were to be incorporated into the UK Shared Prosperity Fund it should be marginal to the main formula-based allocation.
- Sub-regions, most probably revised LEP areas, should remain the basis for financial allocations to areas within England.
Activities to be supported
- The government’s intention to make narrowing the differences in prosperity across the UK the key objective of the new Fund should be supported.
- Local partners should be given flexibility to define the types of projects on which the UK Shared Prosperity Fund is spent, so long as the activities remain consistent with the wider objectives of the Fund.
- Requirements to fund specific activities should be kept to a minimum, but we would also expect the spending plans of local partners to be a balanced portfolio.
Management
The APPG expects the UK government to respect the devolution settlement and therefore any guidelines for the Fund as a whole should be kept at a strategic broad level and agreed jointly between the UK government and the devolved administrations.
- Within the framework of the agreed guidelines, the UK government should transfer responsibility for the detailed design and delivery of the relevant parts of the UK Shared Prosperity Fund to the devolved administrations and their partners.
- Reflecting this devolved responsibility, the Fund should be re-branded to reflect the four nations, i.e. UKSPF England, UKSPF Scotland, UKSPF Wales and UKSPF Northern Ireland.
- There should be a strong emphasis on allowing local partners to define and measure target outcomes.
- The UK government and devolved administrations should work with local players to seize the opportunity to design a simplified administrative structure that works.
- The management structures for the UK Shared Prosperity Fund should make greater efforts to engage local authorities.
- The monitoring and evaluation of programmes and projects should aim to build on the experience with EU funding.
You can read the full report here