We face a looming cliff edge for the UK Shared Prosperity Fund (UKSPF) at the end of March next year when existing funding runs out. Last week I held an adjournment debate in the House of Commons to highlight the risk this poses to the new Labour government’s plan to turbo-charge economic growth across the UK. I argued the government should collaborate with local authorities to learn the lessons from the last few years and design an improved version of the UKSPF that will drive regeneration, support businesses, and boost skills. But noted that doing so will take time; indeed, the Minister referred to fifteen to seventeen strands of existing local growth funding that will need to be considered. I also called on the Chancellor to extend the existing UKSPF for another twelve months in her forthcoming Budget, to avoid compromising services that are supporting businesses and helping people back into work.
The UKSPF was introduced as the domestic replacement for the European Structural and Investment Fund (ESIF) after Brexit. The funding provided by the previous Conservative government did not match the ESIF, but it did provide local authorities with some devolved funding to support local priorities over the last three years. During the debate, I drew on my experience as the former Medway Council Cabinet Member for Economic and Social Regeneration to help the Minister understand the positive impact the UKSPF has had.
In that role, I ensured we used the UKSPF to help community groups run events that would bring thousands more people to our town centres, boosting local businesses and bringing people together. We offered small “feasibility funds” to help groups show that an idea would work and allow them to go on to attract funding from other sources. We provided grants to help businesses grow by purchasing modern technology and equipment. And we funded net zero audits and green grants for local businesses who wanted to reduce their costs by making premises more energy efficient and get the green certificates that are now needed to bid for many contracts. The outcomes from these projects already exceed those set out in the original investment plan Medway sent to Whitehall, and I encouraged the Minister to interrogate the data across the UK to understand what other interventions worked best.
Despite these successes, the UKSPF was not perfect, so I also used the opportunity to bring to the Minister’s attention the broader feedback that the Local Government Association (LHA) has received from local authorities. For instance, there were challenging timescales from Whitehall, with local authorities having to put together an investment plan within just three months. Annual funding restrictions meant many local authorities only commissioned services for 12 months to manage the financial risk, making it difficult to address long term issues. And central government restrictions, such as requiring skills to be addressed in year three, constrained local authorities who should instead be trusted to work with local stakeholders to deliver programmes that address local needs. I also argued that the reporting process should be made less bureaucratic while still providing assurance that taxpayer money had been spent appropriately and effectively. However, the main feedback from local authorities was that a replacement for the UKSPF needed to be much more long-term, with the LGA suggesting six-to-eight-year funding cycles.
We are fortunate that the Minister for Democracy and Local Growth, Alex Norris MP, has a strong background in local government and has seen himself the positive impact of the UKSPF in his own constituency. The Minister said his mailbag was already full, with many Members and organisations from across the UK asking him what is to come next on the UKSPF. This is helpful and we must keep the pressure up, especially as the Minister was not able to pre-empt the Budget on 30th October and commit to any bridge funding.
I welcomed the Minister’s comments supporting a lighter touch approach to monitoring and a less directive approach from central government. He was correct to say there is a mutual wish to reset the relationship between central and local government to make it a better partnership to drive better outcomes. And while he was not able to meet the LGA’s request for six-to-eight-year-funding windows, he was able to commit to the principle of longer-term funding allocation and said that annual funding cliff edges were at the forefront of his mind as he considered future schemes. I hope that my adjournment debate has prompted more focus on the value of the UKSPF and the need for the new Labour government to ensure it is continued and fully incorporated into its future local growth plans.
UK Shared Prosperity Fund must be fully incorporated into Labour’s future growth plans
