The Shared Prosperity Fund (SPF) proposals

There is now a general disquiet in non-governmental circles around the substantially stalled process to develop the new SPF. It is no longer controversial to acknowledge that this paralysis is a product of the shattering of both parliament and government by the consequences of the 2016 Brexit referendum. The premise of SPF is or was that it would replace the EU structural and investment funds (ESIF) in the UK.

ESIF is worth around £2.4 billion a year to the UK, and it is a multi-annual fund with a legal base (similar to the Comprehensive Spending Review process in the UK but with stronger laws). In the 1980s the ESIF method of locally managed but internationally audited programmes emerged, the previous method had been one of many small projects, and all directly managed in Brussels. Throughout the 1990s UK local authorities strongly defended the ESIF method because it gave local control and multi-annual certainty over substantial capital and revenue funds. For the same reasons Whitehall and ministers felt by-passed but could not change the EU consensus.

As a case study (from this writer’s experience 1991-2002) Manchester City Council established a Resource Procurement Group which brought together various EU and UK funds to operate multi-funded neighbourhood programmes which dovetailed the various funds into local priority projects, providing a continuity of local provision almost regardless of the annual variations, new funds starting, and older funds being closed. Many such funds were area based and deprivation based (often two sides of the same coin) and it was the collapse of these UK area based funds from 2010 that has impacted hard on local authority finances, and especially in the urban north. So to some extent, the details of the SPF’s possible operations are second-order matters to the overall level of funding available, and to the multi-annual stability of such ‘guaranteed’ funds. In these regards the ESIF arrangements have consistently set a higher standard than UK public funds. That is point one.

The second point is also contextual, but perhaps even more important. There is already a consensus that historians will remark of the failure by government at the time to go into the 2016 referendum with any plan about what to do if people voted to leave. Now, in 2019, we risk the reverse happening. If the UK finds itself remaining in the EU, either by a further decisive moment or by a drift of general inertia and weariness, again we have no plan, this time to remain. The current ESIF multi-annual period ends on 31 December 2020, and already the legal and political discussions are well advanced for the 2021-onward next period.

So the question is, given the impossibility of government for contingency planning – then to leave or now to remain – what needs to be done in the towns, cities and rural areas of the UK where prosperity has left?

At one level we can assemble a programme of what might be called typically needed projects: revitalising High Streets, reducing childhood obesity and ill-health, supporting people of all ages into careers in the service sectors, building up the arts and cultural experience-economy alongside existing retail and its similar consumption-economy which, in green terms, need to be modified if we are to move towards sustainable economies and places.

But behind the scenes, we also need the ability to plan across years: to mix capital and revenue funds within one coherent programme, mindful that regeneration and sustainable communities (cross-party, from Michael Heseltine to John Prescott) requires interventions of a length that changes the next generation for good whatever the short-term changes in the position of the electoral cycle. To understand this is to appreciate that even a CSR timescale is short-term in terms of achieving regeneration and sustainable communities.

Finally, a comment on capital programmes. A key change in Whitehall since the mid-1990s has been the loss of experienced staff in terms of running a capital programme. Whether this loss was caused by the move to PFI will be another matter for historians, but the effect has been that departments tend to still be able to control revenue programmes but they outsource their capital programmes, for example to construction firms or to rail operators. This has an unwanted effect of removing long-term planning within departmental spending strategies, with a focus now limited on annual settlements and periodically a CSR, but not further ahead. Sadly this also applies to HM Treasury, which has increasingly become a career stepping stone rather than a destination.

Next steps

There will be any number of organisations and worthwhile local projects seeking whatever funding is possible, even if only for a few months, such is the level of austerity and deprivation being faced in many areas of Britain where prosperity has left. The awful long-term trend of now shortening lifespans for poorer people is the KPI here.

This immediate need must be addressed, but for long-term generational improvements we need to also start on capacity building the ecosystems (public, voluntary, cultural, private) behind these projects (such as with ESIF technical assistance funds and whatever UK equivalents can be found as well) so that future generations get a chance again to experience sustainable prosperity and wellbeing.

(these are the personal views of the writer)

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