Neil O’Brien – 2022 Statement on the UK Shared Prosperity Fund

The statement made by Neil O’Brien, the Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities, in the House of Commons on 19 April 2022.

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.

As funding is confirmed for three financial years—2022-23, 2023-24 and 2024-25—this will facilitate places’ planning and allow the UK Shared Prosperity Fund to act as a predictable baseline element of local growth funding. It comes alongside other funding to level up the UK, including the £4.8 billion Levelling Up Fund and £150 million Community Ownership Fund, and builds on the £200 million for UK Community Renewal Fund projects that we announced last year.

A key part of the fund is Multiply, the adult numeracy programme. With up to £559 million in funding available, this programme will offer local and national support for people to improve their numeracy skills—equipping adults across the UK with the skills they need to progress in life. It is being led by the Department for Education in England and funding will be distributed to the Greater London Authority, all Mayoral Combined Authorities, and upper tier/unitary authorities outside of these areas in England. In Scotland, Wales and Northern Ireland, Multiply will be delivered alongside wider programmes of UK Shared Prosperity Fund activity.

Further information about the fund and the investment planning process, as well as local allocations, is included in the UK Shared Prosperity Fund Prospectus and the Multiply Prospectus, both of which have now been published.

The next step is for each place to work with the private sector, civil society and others, as well as the devolved administrations in Scotland, Wales and Northern Ireland, to develop a local investment plan. This should set out how they will target their funding on local priorities, against measurable goals. Once this is in place and agreed with the UK Government, they can unlock three years of investment.

This new fund is a clear manifestation of our commitment to level up all of the UK. Alongside historic levels of investment confirmed through Spending Review ’21, it will make a significant contribution to overcoming geographic disparities, spreading opportunity and boosting employment, wages and life chances right across England, Scotland, Wales and Northern Ireland.