Policy Briefing

SPF2020: How the Shared Prosperity Fund can protect the UK economy

24 Feb 2020

Everything changes on 1 January 2021. The UK will have reached the end of the post-Brexit transition period, under which it continues currently to benefit from membership of the European Union and moves to new arrangements as a third country (in the EU parlance). The end of that transition period also marks the end of the country’s participation in a series of programmes that collectively invested nearly €16.5bn into the UK since 2014. These programmes – the European Regional Development Fund, the European Social Fund, the European Maritime and Fisheries Fund and the European Agricultural Fund for Rural Development – have been of huge value to the UK, in particular to the areas of the country outside the growth engines of London and the south east. Scotland, Wales, Northern Ireland and the English regions have benefited enormously from this investment, seeing major projects implemented.

A key component of the UK leaving the European Union is the notion that the UK government will be better equipped to target capacity building and infrastructure provision currently funded under the European Structural and Investment Funds.The government has pledged to use the funds that were contributed to the European Union to spread wealth across the country and narrow regional inequalities. The Shared Prosperity Fund has been mentioned in speeches and comments by successive Prime Ministers, Chancellors and Business Secretaries since the vote to leave the European Union was announced. However, there is surprisingly little detail about how the fund will work, what will be eligible for investment and how much resource will be available.

Clarity is much needed and is sought by those communities that have benefited from previous investment, anxious to ensure that there is no limbo period between the end of European funded projects and the commencement of those under the Shared Prosperity Fund. As European projects will begin to shut in 2021, it should be a priority for the Shared Prosperity Fund to have commenced its investments no later than spring 2021.

Building on the successes of European Structural and Investment Funds, the Shared Prosperity Fund needs to adhere to three key principles:

  1. Devolve decisions as far away from the centre as possible so that the UK’s regions and nations can target development where it is most needed.
  2. Promote long-term, flexible, local approaches to investment to avoid the pitfalls of electioneering on economic development and ensure there is no centralised one-size-fits-all approach.
  3. Reduce bureaucracy and burden to enable swift action and innovation in regional economic development.

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