Commons Library briefing note on The UK Shared Prosperity Fund

After the UK leaves the European Union, it will no longer receive structural funding (which is worth about €2.4 billion per year).

This funding is used for boosting several aspects of economic development, including support for businesses, employment and agriculture, and is administered by the different nations of the UK.

In order to replace this funding, the Government has pledged to set up a Shared Prosperity Fund to “reduce inequalities between communities”.

There are several issues that will need to be considered when setting up the Fund. These include:

• the priorities and objectives of the Fund;
• the amount of money to be allocated;
• the method of allocating it between the countries and regions of the UK, and whether this is based on need (and what measure is used to determine need);
• the model by which funding will be allocated, whether pre-allocating an amount for a country or region or inviting competitive bids from across the UK;
• the length of the planning period and the way in which this could conflict with domestic spending priorities;
• who administers the funds (whether they are controlled from Westminster or by the devolved administrations) and the degree to which local authorities are involved.

Although the Government has not yet published its consultation on the Fund, a number of organisations have already made comments about the possible design. Although these vary in their emphasis (for example, the Welsh Government is strongly opposed to the idea of administering the Fund from Westminster), most organisations seem to agree that the level of funding should be at least maintained at its current level, it should largely be allocated based on need, and local authorities and partners should be closely involved.