Sharing prosperity? options and issues for the UK Shared Prosperity Fund
- Document type
- Davenport, Alex; North, Samuel; Phillips, David
- Institute for Fiscal Studies
- Date of publication
- 13 July 2020
- Trends: economic, social and technology trends affecting business
- Business and management
- Material type
European Structural and Investment (ESI) funds help to pay for initiatives supporting business development, research and development, investment in digital and green infrastructure, as well skills and training interventions and support for job-seekers. But with the UK having formally departed the European Union, the country will stop receiving new ESI funding at the end of 2020. Thus, for 2021 and beyond, the UK government faces choices over what to replace ESI funding with. This is important as ESI funding forms a substantial component of spending on regional economic development in the UK, especially in the poorest regions. The government has announced the creation of the UK Shared Prosperity Fund (UKSPF) to this end, but has so far given few details around its scale, design and implementation.
Drawing on a review of the current ESI schemes, this report explores some of the key issues that the government and stakeholders need to consider for the new system. It also looks at how the funding allocations for different parts of England will depend on the indicators of funding ‘need’ used to calculate UKSPF funding allocations. This shows that a focus on areas with low productivity would see several rural areas receive the highest levels of funding per person, while a focus on low education and employment, and especially high deprivation, would channel the most funding to more urban parts of the Midlands and the North. The report concludes with a brief discussion of the issues posed by the COVID-19 crisis for the design and implementation of the UKSPF.
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