Greater clarity on the UK Shared Prosperity Fund is needed says Holyrood’s Finance & Constitution Committee

04.10.2019

Greater clarity is required on the UK Shared Prosperity Fund (UKSPF) that is set to replace EU Structural Funds from 2021 says Holyrood’s Finance and Constitution Committee.

In its report published today the committee says the UK Government must adopt a greater sense of urgency in developing the new UKSPF so that valuable expertise, knowledge and capacity is not lost before it becomes operational.

The Committee also recommends that Scotland’s share of the UK Shared Prosperity Fund should be no less than its currently receives as EU Structural Funds and that it must retain the current flexibility to fund Scottish priorities. 

EU Structural Funds were originally created to help reduce economic inequalities between regions across the European Economic Community, as it then was.

The current structural funds programme is worth about €10.7 billion to the United Kingdom and up to €872 million to Scotland across the seven-year budget period which ends in 2020. 

After 2020 the UK Government's policy intention is to operate a domestic replacement fund - the UK Shared Prosperity Fund (UKSPF).  A UK Government public consultation on the policy, expected to take place before the end of 2018, is now scheduled for 2020. In June 2019, the Scottish Government established a steering group to consult on future funding arrangements for Scotland.

Today’s report sets out the committee’s views on the proposed UKSPF.

Finance & Constitution Committee Convener Bruce Crawford MSP said:

“EU structural funds are a valued source of support for communities across Scotland especially in rural areas.  We welcome the intention to replace those funds should the UK leave the EU but are concerned at the delay in the consultation on the UKSPF.

“This is causing concern and uncertainty for those currently in receipt of EUSF.  It also impacts on transition planning by current EUSF recipients as well as pre-application planning by potential new recipients.

“We have asked both the UK and Scottish Governments to confirm how they will address these concerns.”

On Scotland’s share of funding, Mr Crawford added:

“We agree with the evidence we received, and with the Scottish Government, that Scotland should receive from the UKSPF no less than its current allocation under existing programmes. There should be no regression in funding given regional disparities across the UK have not reduced.

“We are therefore seeking confirmation from the UK Government that it agrees with this position, particularly in light of its own statement that current EUSF money coming back after Brexit will be used for the UKSPF.

“We are also asking the Scottish Government to confirm how it considers the Scottish share of the UKSPF should be calculated”.

Elsewhere in the report, the committee agreed that any replacement scheme must be operational for early 2021 so there is no gap in funding during any move from EUSF to the UKSPF.

The committee is also concerned that the uncertainty regarding future funding arrangements is now impacting on staff retention and ongoing funding for programmes - especially those delivered by small organisations.

Once any UKSPF is operational the Committee also recommends that those UK or Scottish public bodies which spend UKSPF monies in Scotland should be accountable to the Scottish Parliament for that spend.

Find the committee’s report here.

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