Fears ‘inequality is being entrenched’ by UKSPF local benefits
The government is today accused of a ‘cynical swindle’ and a ‘missed opportunity’ after revealing how much each region of England would get from the UK Shared Prosperity Fund.
The Institute for Fiscal Studies (IFS) said the Department for Leveling Up, Housing & Communities used the same formula to distribute the money as the EU development fund it replaces.
In a scathing briefing, IFS said: ‘Inequalities in the EU funding regime that could have been corrected will instead be entrenched.
Meanwhile, South Yorkshire Mayor Dan Jarvis (Lab) said his region owed “£900million” but had only received £38million over three years – a decision he called it a “shame”.
Under the UKSPF, local business partnership areas will continue to receive the same amount of funding in real terms as before with EU funding.
However, the IFS said giving each LEP area the same funding in real terms ‘disregards the fact that their populations have changed very differently since previous EU funding allocations were set’. .
An example used by the IFS was that the population of Cumbria increased by 0.3% between 2013 and 2020, while the population of Warwick and Coventry increased by around 10%.
The funding formula used to allocate the UKSPF also replicates “undesirable features of the EU funding regime”, the IFS said.
The ‘arbitrary cliff edge formula’ used by the EU meant that funding was ‘strongly directed to the two poorest parts of the UK’: Cornwall and the Isles of Scilly, and West Wales and the valleys.
The IFS said these areas received up to eight times more funding per person than “areas that are only marginally more prosperous”, which include South Yorkshire, Lincolnshire and the Tees Valley.
David Phillips, Associate Director at the IFS, said: “This is a missed opportunity to reap Brexit dividends and improve policy.
“Instead, the government has simply replicated an unfair and ill-conceived EU funding scheme.
“By promising that every nation and every local economic partnership area will receive exactly the same as under the EU system, the government has missed an opportunity to design a more rational funding allocation mechanism that distributes the money more evenly across the poorer parts of the UK.”
South Yorkshire Mayor Mr Jarvis, also MP for Barnsley Central, said: ‘This announcement is nothing more than a scandal; a cynical Tory scam that fails completely in South Yorkshire and drives a trainer and horses through the government’s upgrade scheme.
“Instead of delivering the extra £900m due to South Yorkshire, we received just over £38m over a three-year period.
“This announcement was quietly smuggled hours before purdah, and with the suspension of parliament, it illustrates the government’s complete disregard for the people of our region.”
Under the new fund, the combined city authorities and the Greater London Authority will be awarded a share of the UKSPF core funding.
They will also receive a share of Multiply, the government’s new fund to improve adult numeracy across the country.
Unit councils will also be awarded a share of core funding from UKSPF and Multiply.
For areas with two-tier local governance, district and borough councils will only receive core funding from the UKSPF, with county councils only allocating a share of Multiply.
This is with the exception of North Yorkshire CC and Somerset CC, which are currently undergoing local government reorganization. Each council will be allocated a share of core funding from UKSPF and Multiply.
The government has published a full breakdown of allocated funds and a prospectus providing further details of the allocation.
The City Authorities Special Interest Group echoed the concerns of the IFS and Mr Jarvis, tweeting: ‘This injustice at the edge of the cliff means Cornwall (population 565,000) will receive more core funding for shared prosperity in the UK than West Yorkshire (2.3 million) and the city of Liverpool. Region (1.5 m) combined. »
The Local Government Association welcomed the placement of funding in the hands of local leaders.
Kevin Bentley (Con), the chairman of the LGA’s People and Places Council, said: “Councils are uniquely placed to plan ahead for the post-pandemic challenges we face in investing in their areas, for which these programs provide certainty.
“So it’s good that they’ve been put at the heart of the UKSPF and Multiply delivery, something we’ve been asking for for a long time.”
Cllr Bentley called for local areas to be given ‘maximum flexibility to design their investment plans that target local priorities’ and said that ‘longer term council leaders want to work with government to ensure greater stability and long-term support for this funding. flow”.
Levelingly, Minister Neil O’Brien was quick to defend the allocations and the funding formula.
Responding to a tweet from the Northern Powerhouse Partnership, which claimed UKSPF allocations were ‘not real devolution’, Mr O’Brien said: ‘Before 2010 these funds were run by unelected RDAs and the only place with a devo deal was London.
“Now elected leaders get the money – mayors and local authorities. And there’s a lot more flexibility in spending it. How is this not real decentralization? »
A DLUHC spokesperson said: “The UK Shared Prosperity Fund will match EU structural funds to allow continuity of funding for each area.
“For England, we have taken a mixed approach to allocations, taking into account the size of the population and the needs of the local area.
“UKSPF will give local people control over how UK money is spent, allowing local communities to invest in the projects that matter to them.”