The Shared Prosperity Fund: Where’s the imagination? Where’s the control?

April 14, 2022  

The new Shared Prosperity Fund promised a lot – slashing bureaucracy, giving local control, creating wealth. So why does it so closely replicate dumped EU funding? Joe Sarling finds a severe case of centralised civil service-ese.

In the latest Levelling Up announcement, the government has released plans for the UK Shared Prosperity Fund (UKSPF). Originally conceived to replace lost EU-related funding, it is an important investment pillar for the government in a post-Brexit, pre-Levelling Up world. Moreover, understanding its origins and knowing the government’s agenda, it could have been a useful non-financial signal to local areas: ‘you wanted us to ‘take back control’ and now there is an opportunity for us to be partners to meet local needs and improve outcomes’.

But alas, the fund structure, a product of existing political and civil service orthodoxy, showcases the frustrating centralised system of fund delegation and is entirely hamstrung by short term risk mitigation.

Is this what ‘taking back control’ looks like?

Despite leaving the EU, the UKSPF that essentially replaces EU funding will ensure every LEP area in England, Scotland and Wales will receive the same amount as they previously did..

In pure financial terms, I can’t help but feel this is the first missed opportunity – if places felt they were unfavourably treated by EU rules, regulations, and bureaucracy, a replacement fund that doesn’t think about need differently may not feel much like new control at all. Indeed, as Ben Zaranko (Institute for Fiscal Studies) points out, there are LEP areas performing poorly compared to the national average on five key metrics. Surely government might consider providing extra assistance to these places, rather than be restrained by EU methodology that has some methodological flaws and cliff-edge cut-off points that skew allocations.

But this fund was always going to underdeliver in imagination and innovation. The original prospectus and the most recent press release talks a big talk about “fostering new relationships”, “slashing bureaucracy” and being “more flexible and locally led” to “unleash the creativity and talent of communities” but the reality is that these documents perfectly showcase centralised civil service-ese.

Local areas can “influence the fund” but the “area’s allocation will be allocated by formula and “approved by the UK Government” to “ensure coherence with wider UK Government [departments and priorities]”.

The tone and structure of a centralised process is in full flow – as Adam Hawksbee (Onward) notes, “only in Britain can ‘local control’ mean ‘write a plan, submit it to civil servants, they’ll assess/amend it, then they’ll monitor that you’re spending the money how you said you would – and take it back if you don’t”.

Even with the promise that there will be more allocation discretion for councils within LEP areas than under EU funding, it will still be based on ‘an index of need’. This process both bakes in the disparity problem – two areas with identical ‘need’ but in different LEP areas will receive different funding – and doesn’t fully embrace devolution.

A future open goal?

On the one hand, one could view the UKSPF allocation as a plaster – a way of providing some level of consistency now in order to think different in the future. Indeed, this could still happen. But the problem is that the tone of all of the literature to date describes something this fund is not: a new and different way to best ensure we have greater control over our domestic and local area priorities and drive better outcomes.

With greater agency and greater autonomy comes greater opportunity for innovation. Indeed, the reasons the Government is championing the UK’s withdrawal from the EU are extremely similar to those reasons that communities want genuine and authentic autonomy over how they invest in their areas and meet the needs of their people.

There is a big open goal for government here – tap into that spirit and provide local councils and local communities with greater funding, genuine autonomy, and less centralised civil service red tape. Local areas know the needs of their local communities. Show them you’re serious about ‘taking back control’ and let them take charge instead of constantly pitching for permission.

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