Once the LGA knew the direction of travel for EU funding following the UK’s exit from the EU, we saw the opportunity to retain the positive aspects of the funds, but also to work with Government to help shape the new funding landscape to ensure better outcomes, better efficiency and programmes that work for local communities. The LGA has consistently made the case for the domestic replacement for EU funding, the UK Shared Prosperity Fund (UKSPF), to be a locally determined fund driven by democratic accountable councils and combined authorities.
In tandem with the launch of the Levelling Up White Paper on 2 February 2022, the Government published the pre-launch guidance for the UK Shared Prosperity Fund, with further guidance and allocations expected in March 2022.
This briefing summarised the guidance and some of the key issues councils and combined authorities will need to consider in advance of further details being released. It is not intended to replace the guidance and councils and combined authorities should still review any published Government information and guidance.
The Government reiterated the announcement made at the Autumn Budget and Spending Review in 2021 that £2.6 billion will be allocated in the first three years of the UKSPF
- £400 million allocated for 2022/23
- £700 million allocated for 2023/24
- £1.5 billion allocated for 2024/25.
In addition, £1.6 billion will be available through the British Business Bank. Details of how this will operate will be published soon. This does not yet provide the long-term stability or quantum of the European Structural and Investment Fund Programme it is replacing.
The fund will be allocated as opposed to using competition and is expected to be a mix of revenue and capital. The Government’s intention is to remove the bureaucracy of the European funds that it is replacing.
Vision and objectives of the fund
The UKSPF is intended to support the Government’s wider Levelling Up agenda, including:
- Boost productivity, pay, jobs and living standards, especially in those places where they are lagging.
- Spread opportunities and improve public services, especially in those places where they are weakest.
- Restore a sense of community, local pride and belonging, especially in those places where they have been lost.
- Empower local leaders and communities, especially in those places lacking local agency
The UKSPF is expected to build pride in place and increase life chances across the UK by providing funding to improve local places and supporting individuals and businesses. The fund is expected to complement the Levelling Up Fund and Community Ownership Fund.
Delivery of the UKSPF
The Government has indicated the UKSPF demonstrates a new direction in the relationship between central and local government.
- Role of national government
The Department for Levelling Up, Housing and Communities (DLUHC) leads the fund, which will work in partnership with other relevant government departments, providing the fund with an overarching framework. It will be managed by a UK-wide ministerial forum, which will monitor investment and overall performance.
- Role of local government
Councils and combined authorities have been given a leading role as outlined in the Government’s delivery geography. This means lead authorities will be mayoral combined authorities, the Greater London Authority and lower-tier or unitary councils. Local UKSPF will be aligned with any future devolution deals with local areas.
Lead authorities will manage, assess and approve project applications, process payments and undertake the day to day monitoring of programmes. There will be the flexibility to choose whether to commission projects, run competitions or deliver programmes in house.
The LGA has continually highlighted the need for capacity to be developed in the sector to deliver the ambitions of the fund. The Government has recognised this and will allow a proportion of the UKSPF to be used to support management and monitoring costs associated with the fund. In addition, they have also committed to looking at providing additional capacity, for which we expect there to be further details available in Spring 2022.
Development of Investment Plans
The Government will be setting out conditional allocations, expected in March, based on the Government defined geographies of the fund. For local places to access the fund, they will need to submit an investment plan setting out their desired local outcomes and the interventions they intend to use to achieve them. Places will be expected to agree indicators with Government based on their investment plans so the Government can monitor progress.
The UKSPF will be guided by three investment principles. These are:
1. Communities and Places
- Strengthening our social fabric and fostering a sense of local pride and belonging, through investment in activities that enhance physical, cultural and social ties and amenities, such as community infrastructure and local green space, and community-led projects.
- To build resilient and safe neighbourhoods, through investment in quality places that people want to live, work, play and learn in, through targeted improvements to the built environment and innovative approaches to crime prevention.
2. Supporting local businesses
- Creating jobs and boosting community cohesion, through investments that build on existing industries and institutions, and range from support for starting businesses to visible improvements to local retail, hospitality and leisure sector facilities.
- Promote networking and collaboration, through interventions that bring together businesses and partners within and across sectors to share knowledge, expertise and resources, and stimulate innovation and growth.
- Increase private sector investment in growth-enhancing activities, through targeted support for small and medium-sized businesses to undertake new-to-firm innovation, adopt productivity-enhancing, energy-efficient and low carbon technologies and techniques, and start or grow their exports.
3. People and Skills
- Boost core skills and support adults to progress in work, by targeting adults with no or low-level qualifications and skills in maths, and upskill the working age population, yielding personal and societal economic impact, and by encouraging innovative approaches to reducing adult learning barriers.
- Support disadvantaged people to access the skills they need to progress in life and into work, for example, the long-term unemployed and those with protected characteristics through funding life, and basic skills where this is not delivered through national or local employment and skills provision.
- Support local areas to fund local skills needs and supplement local adult skills provision e.g. by providing additional volumes; delivering provision through a wider range of routes or enabling more intensive/innovative provision, both qualification based and non-qualification based.
- Reduce levels of economic inactivity and move those furthest from the labour market closer to employment, through investment in bespoke employment support tailored to local needs. Investment should facilitate the join-up of mainstream provision and local services within an area for participants, through the use of one-to-one keyworker support, improving employment outcomes for specific cohorts who face labour market barriers.
Lead authorities will be using funding in 2022/23 and 2023/24 for priorities 1 and 2. For priority 3, funding will commence in 2024/25, with lead authorities expected to collaborate with other stakeholders and tiers of local government. As the European Social Fund programme ends in 2023, we understand the Government will be introducing criteria for lead authorities to support at-risk voluntary and community sector organisations delivering European funded people and skills programmes before 2024. The LGA is exploring the potential impact of gaps in funding.
£559 million has been ringfenced for the Multiply programme intended to deliver the Government’s priority of improving adult numeracy. This part of the UKSPF will be managed by the Department of Education and will have a national and local element, including a national online platform, Further detail of this will be forthcoming. The LGA has previously set out that this Fund needs to align closely with adult education budget funding and resulting adult and community learning provision.
Next steps for Government
The Government intend to engage with the sector and partners in February and March. A webinar was held for English chief executives on 8 February and we will continue to seek further engagement opportunities.
In March, the Government will announce local allocations and will commission local areas to develop their local Improvement Plan to be submitted by Summer 2022. The Government will publish supporting guidance and rules of the fund. This will include a toolkit that will provide guidance for local areas to choose the outcomes and interventions they will prioritise for the fund.
Next steps for local places
The Government has asked local places with responsibilities for the fund to commence conversations with local stakeholders to determine what their priorities and desired outcomes from the fund should be.