A think tank has concluded that the UK Shared Prosperity Fund (UKSPF), post-Brexit, could cause trust problems between the UK government and devolved administrations.

The following report is a new one. Institute for GovernmentThe UKSPF will replace EU structural funds’ and be launched in April 2022. It could also harm the UK government’s main objective to bring the four UK nations closer together.

This report outlines how the UKSPF could function in accordance with the devolution settlements. It also takes into consideration the existing roles of the devolved governments in the administration of EU structural funds. Finally, it delivers the UK government’s goal to create a more targeted and less bureaucratic fund.

It asks the government to consult more with devolved countries, to establish clear spending criteria, and to set up a governance structure that allows devolved nation to work together.

Between 2014-20, the UK received a total of PS11 billion in budget transfers as an EU member. The devolved countries received more money than England. It was decided by the administrations in Edinburgh Cardiff and Belfast how and where they would spend the funds.

The UKSPF, on the other hand, will be managed through a single UK-wide structure that is administered by the UK government. Devolved administrations will have a limited role. This approach is designed to give UK ministers the ability to direct investment within the devolved countries and to show that the fund is in the interests of the union.

However, these plans are unwelcome intrusions from the point of view of the devolved government.

The report, which is due to be published in autumn with the UKSPF framework, states that the UK government should:

  • Improve its approach to consultations with the devolved government, share more information and stop making announcements without notification
  • Establish transparent criteria to allocate funds, based on an assessment at both the local and regional levels of relative need. Clarify how it will make sure that spending under this new fund complements, rather than duplicates, spending programs managed by the devolved government
  • Describe how it will interact with its devolved counterparts at every stage of funding allocation and how disputes will to be resolved
    Explain how it will fulfill its pledge that devolved countries will receive “at minimum” funding to support their economic development.
  • To allow devolved governments to plan and budget efficiently, ensure the UKSPF is operational for at least five years
  • Describe the operation of the fund in Northern Ireland and how funding allocations will be made to meet the needs of cross-community support.

Report co-author, IfG senior fellow Akash Paun He stated: “There is an opportunity to create something more flexible and less bureaucratic that the EU system. This demonstrates to the voters the value and importance of UK-wide action.

“But, the government seems to be continuing with its plans for UK Shared Prosperity Fund without almost any meaningful engagement with devolved governments and other stakeholders.” Ministers could undermine their own goals if they don’t change their course and work together.

A spokesperson for the UK government stated that they rejected these conclusions. We will ensure that the government continues to work effectively with all four countries to reap the benefits of being one United Kingdom.

“We have engaged with many key stakeholders in Scotland News, across the UK, since 2016, and this helped to identify the opportunities for UKSPF policies and learn lessons from EU funding.

“We will increase UK-wide funding to at least match the EU’s current offer – around PS1.5 billion per year.”

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