Investment of £2.6 billion in communities between 2022-25 kickstarts the post-Brexit Levelling Up agenda
In a Press Release published on the 5th December 2022, the government announced that:
“under the spending plans approved today, England, Scotland, Wales and Northern Ireland are all receiving at least as much as they did before, while also being free from bureaucratic EU processes and having greater say in how the money is used.”Back in 2017, a new plan was announced that would replace the EU Structural Investment Fund (ESIF, which ends in 2023) with a new UK Shared Prosperity Fund. In essence, it was designed to improve opportunities and livelihoods throughout the UK. It allows the UK to decide where, and on what, to spend the money, in line with the Levelling Up agenda. Local Authorities have the flexibility to select projects to fund from UKSPF that reflect the various strategies, policies, needs and priorities of a local area.
Under the spending plans England will receive £1.58 billion, Scotland £212 million, Wales £585 million and Northern Ireland £127 million.
Levelling Up Minister Dehenna Davison said:
“We are taking full advantage of being outside the European Union and unlocking billions of pounds of investment to help level up communities and spread opportunity across the UK. The UK Shared Prosperity Fund will have tangible benefits for people up and down the country, from a young entrepreneur in need of a helping hand or those who want to gain the skills they need to secure a decent, well-paid job. The UK government has worked closely with local leaders across England, Wales, Scotland and Northern Ireland, giving them a greater say in how this money is spent and ensuring funding is directed to where it is most needed.”
Across the UK, the money will be spent on levelling up in three key areas:
What is the focus of the Fund?
Communities and place: projects could include improving parks and green spaces, sports facilities and access to arts and culture to foster a greater sense of pride in place.
Supporting local business: this includes support for entrepreneurs, as well as research and development grants for local businesses to help develop innovative products and services.
People and skills: projects could include specialist support for people with a health condition facing additional barriers into decent jobs. This may include basic life skills, digital training and education in English and maths. As part of the Fund, a multi-million pound adult numeracy programme, Multiply, has been allocated across the UK to support people with no or low-level maths skills to improve their economic and life prospects. The funding for this objective doesn’t kick in until 2024/25.
The aims of the funds are to:
Boost productivity, pay, jobs and living standards, by growing the private sector, especially in places where they are lagging
Spread opportunities and improve public services, especially where they are weakest
Restore a sense of community, local pride and belonging, especially in those places where they have been lost.
Empower local leaders and communities, especially in those places lacking local agency.
Funding for the UKSPF will be £2.6 billion between 2022 and 2025, with this figure reaching £1.5 billion per year by March 2025, delivering on the UK Government’s commitment to match EU structural funds for each nation.
The Government commitment that all local authorities would receive a share of the fund has been honoured, although many authorities (mainly in the South-East) were only allocated the minimum baseline of £1m UKSPF over the three-year spending review period. For unitary authorities, the average was £7.9m (highest, excluding Cornwall, County Durham at £30m), and for lower-tier authorities, the average was £1.9m per authority (highest Lancaster at £5m). All Surrey local authorities received £1m UKSPF allocation each, all with the majority of their UKSPF allocation back-ended to the 2024/25 financial year.
Multiply – aiming to boost adult numeracy across the UKWith some 17m adults only having everyday maths skills roughly equivalent to primary school children, this lack of numeracy has a considerable effect on the individual’s employability, as well as inhibiting higher productivity and profits for businesses.
To help people improve their ability to understand and use maths in their daily lives, the government has made up to £559m available to the Multiply adult numeracy programme to allow the GLA, Mayoral Combined Authorities, and upper-tier/unitary authorities outside of these areas in England, to develop a range of options such as free personal tutoring, digital training and flexible courses that fit around people’s lives and are tailored to specific needs, circumstances, sectors and industries.
Local Government Association:
“The fund is an opportunity to boost productivity and enhance employment opportunities, tackle inequalities and deliver real change to local communities, places and businesses to support the levelling up agenda. It is essential that national government now work with local government to ensure the UKSPF is a fully co-designed and localised funding stream that provides the quantum and longevity needed to deliver the intended outcomes.”
Specific Objectives for the UKSPF FundUnder the broad objective of ‘Supporting local business, there are some more specific Investment Priorities and interventions set out.
E18: Supporting Made Smarter Adoption:
Providing tailored expert advice, matched grants and leadership training to enable manufacturing SMEs to adopt industrial digital technology solutions, including artificial intelligence; robotics and autonomous systems; additive manufacturing; industrial internet of things; virtual reality; data analytics. The support is proven to leverage high levels of private investment into technologies that drive growth, productivity, efficiency and resilience in manufacturing.
E19: Increasing investment in research and development at the local level.
Investment to support the diffusion of innovation knowledge and activities. Support the commercialisation of ideas, encouraging collaboration and accelerating the path to market so that more ideas translate into industrial and commercial practices
E23: Strengthening local entrepreneurial ecosystems, and supporting businesses at all stages of their development to start, sustain, grow and innovate, including through local networks.
E24: Funding for new and improvements to existing training hubs, business support offers, ‘incubators’ and ‘accelerators’ for local enterprise (including social enterprise), which can support entrepreneurs and start-ups through the early stages of development and growth by offering a combination of services including account management, advice, resources, training, coaching, mentorship and access to workspace.
E27: Funding to develop angel investor networks nationwide.
Concerns remain about how complex the funding landscape is, and how much say the devolved administrations will have in the allocation of the funds. In response to the government’s press release, the Welsh Minister for Economy, Vaughan Gething, had this to say:
“This announcement should be seen in the context of a Welsh Government budget that could be worth up to £1 billion less in real terms in 2023-24 alone compared to what we expected last year. The SPF is part of a system that undermines devolution and has little regard to the needs or the wishes of Welsh partners.
The entire approach to the Shared Prosperity Fund has been chaotic. Despite the SPF first being announced in 2017, the Fund was hastily put together earlier this year. It has put enormous strain on local government to develop projects and put in place administrative and governance procedures in unfeasible timescales. Not a single penny of the SPF has been spent in Wales to date.”
The full response can be found here Wales government Written Response
Delivery of funding across the UK is highly complex. Despite complaints about the way the funds are structured and delivered, there is at least an attempt to allocate funding across the UK based on local needs, as assessed by locally elected representatives, rather than projects being identified and funded by central government.