Last week, my Department announced the launch of the £2.6 billion UK Shared Prosperity Fund, publishing a prospectus that sets out the fund’s objectives, priorities and local allocations, as well as how the fund will be delivered. This starts the process of places across the country developing local plans to deliver the fund.
It represents the culmination of concerted effort and joint working across Government, with the devolved administrations in Scotland, Wales and Northern Ireland, and local partners across the UK. It is a key component on our journey to transform the country, set out in the Levelling Up White Paper, and our central mission to level up and spread opportunity and prosperity to all of our communities.
We are investing in domestic priorities and targeting funding where it is needed most: building pride in place; supporting high quality skills training; supporting pay, employment and productivity growth; and increasing life chances.
The UK Shared Prosperity Fund is a marked shift from the EU structural funds it succeeds. Under the EU, organisations had to go through a lengthy application process. Indeed, the process between first application and approval could easily exceed 12 months. The UK employed hundreds of civil servants to facilitate this, with projects only getting paid in arrears. The EU had strict, rigid requirements on what money could and could not be spent on, but our approach is much more flexible, empowering local people who know best.
In contrast, the UK Shared Prosperity Fund provides a three-year allocation to local authorities, with the goal of approving investment plans within three months. The fund will be much more flexible and locally led, freeing communities from the bureaucratic, rigid and complex processes of the EU structural funds. Bureaucracy will be slashed, and there will be far more discretion over what money is spent on. EU requirements for match funding, which impacted poorer places, will be abolished.
Instead of regional agencies, funding decisions will be made by elected leaders in local government, with input from local Members of Parliament and local businesses and voluntary groups. The fund will lead to visible, tangible improvements to the places where people work and live, alongside real investment in people’s skills, giving communities up and down the UK more reasons to be proud of their area.
All areas of the UK are receiving an allocation from the fund, with even the smallest places receiving at least £1 million, recognising that even the most affluent parts of the UK contain pockets of deprivation and need support. Funding will also match in real terms what was previously spent through the European Social Fund and European Regional Development Fund in Scotland, Wales, Northern Ireland and each Local Enterprise Partnership area of England, meeting the UK Government’s commitment to match EU funding. We are ramping up UK Shared Prosperity Fund funding as EU funds tail off, and when that funding ends, the UK Shared Prosperity Fund will match the annual average spending of EU funds, reaching around £1.5 billion per year, which is more generous than the average EU funding budget, which is around £1.3 billion average per year.