In this week’s (25 November 2020) Annual Spending Review, the chancellor Rishi Sunak announced that the value of the UK Shared Prosperity Fund (UKSPF) will reach around £1.5bn a year on average, with its total value set to ‘at least match current EU receipts’.
What we know so far…
UKSPF aims to support people and communities, creating new opportunities and spurring regeneration and innovation.
It will help to level up and create opportunities for people and places right across the UK, with a portion of the fund targeting places most in need across the UK. This will include ex-industrial areas, deprived towns, and rural and coastal communities.
While we know that the fund will operate on a UK-wide basis, it is not yet clear at what level this will be. For example, the funds may be distributed at a Local Authority, Local Enterprise Partnership, or other level, using the new financial assistance powers in the UK Internal Market Bill.
Its funding profile will be set out at the next Spending Review.
Establishing an investment framework
The government will develop a UK-wide framework for investment in places receiving funding and prioritising:
- Investment in people and skills tailored to local needs, such as work-based training, supplementing, and tailoring national programmes (e.g. the Adult Education Budget); and other local support (e.g. for early years)
- Investment in communities and place including cultural and sporting facilities, civic, green and rural infrastructure, community-owned assets, neighbourhood and housing improvements, town centre and transport improvements and digital connectivity– some of this is new under UKSPF, in comparison to what could be done under ESIF which is welcome news based on what local areas may wish to invest in
- Investment for local business including to support innovation, green and tech adoption, tailored to local needs.
Places receiving funding will be asked to agree specific target outcomes within the UK-wide framework. They will then develop investment proposals to be approved by the government among a representative stakeholder group.
Investment should be aligned with the government’s clean growth and net zero objectives.
Replacing the European Social Fund (ESF)
A second portion of the UKSPF will be targeted differently as an ESF replacement to people most in need through bespoke employment and skills programmes that are tailored to local need.
This will work to support improved employment outcomes for those in and out of work in specific groups of people facing labour market barriers.
What happens next?
The government will set out further details of the UKSPF in a UK-wide investment framework set to be published in the spring.
Additional Funding will be announced to help local areas prepare during 2021-22 for the introduction of UKSPF. The government will provide additional funding to support communities to trial programmes and new approaches.
This additional funding will be delivered UK-wide, using the new financial assistance powers in the UK Internal Market Bill. Further details are expected to be published in the New Year.
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