5 things you need to know about the UK Shared Prosperity Fund

In mid-April 2022 the UK government published its prospectus for the Shared Prosperity Fund. UKSPF will replace EU Structural Funds in the UK - hitherto the largest source of public money for business support programmes in the country. The fund has three core themes analogous to the 'Priority Axes' of EU funding programmes. They are: Communities and Place (built environment, public realm and social capital), Local Businesses and People and Skills. Part of the fund is ringfenced for adult numeracy under the 'Multiply' programme.

This briefing outlines the key features of UKSPF...

Like the EU monies it replaces, UKSPF is plan-led with funds allocated to local governments by formula. But there are important differences across all the major dimensions of fund design and management. These will affect the number and type of projects that get funded, how they are delivered, where and by whom...

1. Less money - smaller pot than equivalent, past EU funds. £0.4bn is allocated for 2022-23, £0.7bn for 2023-24 and £1.5bn for 2024-25. Over the period £430m will be ringfenced for adult numeracy. This is less than the EU's ERDF and ESF funds it replaces (approx £2bn per year).

2. Tight timeline – investment plans required by Summer 2022. To draw down their fund allocations, localities must submit investment plans for adult numeracy by 30 June and for the remaining UKSPF themes by 1 August. Once unlocked, UKSPF can reimburse spending from 1 April 2022.

3. More flexibility over uses and delivery than EU funds. For investment plans there is a lower evidence threshold for uses that are pre-specified for each UKSPF theme. But with quality appraisals localities can go beyond these. They can deliver in-house, with partners or outsource.

4. Revenue-based – focused on ‘resource’ or programme spending. Capital spend makes up a minimum of 10% of UKSPF in year 1, rising to 20% by year 3. For ERDF it was 50%. Publicly-funded business support will be less focused on subsidising investments and developing physical spaces.

5. Delivery geography - 'managing authorities' to change over time. Investment planning and delivery will be based on 'strategic regional areas'. In England these are MCA areas, unitary and district councils, moving to devolution deal geographies as these form for counties and city regions.

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