Shared Prosperity Fund: Devolved Administrations

(Limited Text - Ministerial Extracts only)

Tuesday 1st March 2022 Westminster Hall

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Neil O'Brien)]

It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate the hon. Member for Belfast South (Claire Hanna) on securing this important and timely debate. It was also good to welcome the Minister of State for the Northern Ireland Office, my right hon. Friend the Member for Bournemouth West (Conor Burns), who was listening to all the extremely important points being made as closely as I was.

Given the short time available, I will come directly to the important points made by hon. Members. I am not here to argue the toss with them, but to try to start to set out how we will work together to do all these things. As hon. Members know, the shared prosperity fund will provide £2.6 billion of new funding for local investment by March 2025; it is a significant scheme. It will be provided through a funding formula, rather than a competition, which is important. While there are advantages in funding competitions, because they get people sharpening their pencils, there are a lot of advantages in formula allocations, because people have the same certainty that places used to have through some of the European structural funds.

[Stephen Kinnock]

On the point about funding, the Minister has just mentioned the figure of £2.6 billion. Does he therefore accept that the manifesto commitment has been broken? The manifesto commitment was to match the previous funding, which would mean £1.5 billion per year over a seven-year planning cycle. The comprehensive spending review is only a three-year time horizon, so will the Minister accept that the manifesto pledge has been broken?

[Neil O'Brien]

I will come to quantums later in my speech, but no, we will keep our manifesto promises.

The hon. Member for Belfast South raised really important points, and I hope I can start to set Members’ minds at ease. The hon. Member for Strangford (Jim Shannon), whose health I would have feared for had he not been here today, was right when he said that we are all on this journey together.

I agreed with the hon. Member for Ceredigion (Ben Lake) when he said that we must work with devolved Governments and local people, not over their heads. I also agreed with the sensible speech made by hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones), who said that we must use the experience of local partners who know what is needed and how to run these kinds of schemes.

In Scotland, Wales and Northern Ireland we are very clear that we want local partners, at all levels, to be able to shape what is done to this funding and how it is allocated. In Northern Ireland, we have a unique local government landscape in our work on the UKSPF, so we proposed to deliver at a Northern Ireland-wide scale, which will enable us to have an allocation that is felt to be fair by all communities and that will make the most of all the fantastic opportunities that there are across Northern Ireland.

The development of that single Northern Ireland plan will draw on the insight and expertise of local partners, including the Northern Ireland Executive, local authorities, businesses, the community and the voluntary sector, in order to maximise all the local intelligence, insight and knowledge that they have. We have engaged with the Northern Ireland civil service, the Northern Ireland Local Government Association and Solace on UKSPF.

I have also reached out to the Northern Ireland Executive’s Minister for Finance and I plan to discuss the UKSPF further with him on Thursday. I had a very useful meeting with Minister Lochhead from the Scottish Government on Friday, and I am setting up a meeting with Vaughan Gething of the Welsh Government, as well. We are keen to work with all of the devolved Administrations to shape the way this funding is used.

[Deidre Brock]

When the Secretary of State for Levelling Up, Housing and Communities delivered his statement on the levelling-up White Paper, he acknowledged to me that the First Minister was advised of an innovation accelerator that was being put into Glasgow in a phone call only the night before. Can the Minister guarantee that that sort of behaviour will not continue in the future?

[Neil O'Brien]

I think that innovation accelerator is terribly exciting, but I can guarantee to the hon. Lady that as part of UKSPF we are engaging at all levels with devolved Governments and other local partners with important expertise. We will also be setting up an inter-ministerial group, with ministerial representation from all the devolved Governments, so that we have a regular forum on the breadth of my Department’s work to discuss these matters and to ensure there is an open dialogue across the whole UK.

The UKSPF has been designed to empower local places in all four nations of the UK. My Department is engaging with local government associations—including the Local Government Association, the Convention of Scottish Local Authorities, the Northern Ireland Local Government Association and the Welsh Local Government Association—ahead of and following the publication of the pre-launch guidance.

We will continue to engage with the devolved Governments and wider partners on the design and operation of the fund so that we can get the best outcomes across all the UK, because there are so many different priorities. The hon. Member for Strangford talked about fishing communities, and we heard from the hon. Member for North Down (Stephen Farry) about important community groups. There are many different partners that we have to engage in shaping this important programme.

We are engaging with the Northern Ireland Executive at an official level regarding the concerns they raised about programmes that are currently running under the European social fund. That dialogue will help to push on arrangements that maximise that fund delivery in Northern Ireland. However, it is worth thinking about the totality of these different funds because, as well as the shared prosperity fund, we also have the levelling-up fund and the community renewal fund, which is a one-year fund to transition us on to the UKSPF.

For Northern Ireland alone, if we look at some of those different sources of funding, my Department has provided £49 million via the levelling-up fund, £12 million as part of the community renewal fund, and funding through the community ownership fund, which enables different community groups to take things into community ownership. At the same time, we have made important long-term commitments in Northern Ireland, as in Scotland and Wales, through the city and growth deals. In Northern Ireland, those are worth £670 million—funding that is being matched by the Northern Ireland Executive. That is in addition to Northern Ireland-specific schemes, such as Peace Plus.

One of the challenges on my mind, as a Minister, is how we can all work together to ensure that the schemes work in such a way that they are more than the sum of their parts. I am conscious that there are a number of different schemes there; how do we ensure that the totality of the opportunities in Northern Ireland, which are very exciting, are best served by the confluence of all these different funding streams? It is useful, through t UKSPF, to have some funding that is not challenge-based but formula-based, and therefore, in that sense, a bit more flexible to provide bits of match funding to complement those other, existing funding streams.

[Patricia Gibson]

The Minister mentioned the importance of his Government working in partnership with the devolved Governments. I am sure we are all pleased to hear that. Would he therefore like to comment on the conclusion of the House of Lords Constitution Committee in its report in January that the UK Government have ignored—and continue to ignore—devolution and the devolved Governments in this process?

[Neil O'Brien]

There will always be a range of views on these questions. As my Secretary of State set out in his evidence to the Scottish Parliament the other day, our strong belief is that all these things will work best if we can engage not just the devolved Governments but local partners across the whole the UK.

It is worth putting these issues in the context of the wider funding settlement, as well as the funds that are specific for regeneration and community renewal. In the spending review, hon. Members will have seen that we have £15 billion for Northern Ireland annually for the next three years—the highest figure since devolution. There will be £41 billion for Scotland—again, the highest figure since devolution—and £18 billion for Wales, which is, again, the largest figure, in real terms, since devolution. So the context is that of a wider public spending settlement, and although we would always like to have more money to do things, that will enable us to do some really important things for some communities, particularly in Northern Ireland, which experienced extremely high levels of deprivation—I think that we would all recognise that.

Hon. Members have raised some of the things that the community renewal fund is doing. I would stress some of the positive things that that funding is doing, which leads into the work of the shared prosperity fund. The hon. Member for Belfast South rightly quoted the wise comment of her former leader that the best peace process is a job.

The hon. Member for North Down stressed the importance of skills—again, quite rightly. The community renewal fund is giving half a million pounds to the NOW Group to support people with disabilities through specialised employment academies and job mentoring. It is also giving nearly half a million pounds to South West College, Southern Regional College and Queen’s University Belfast to upskill construction operatives to fill that skills gap, and there will be just over £500,000 for a hydrogen training academy to deliver training for 180 people, to get a skilled workforce that can take advantage of the exciting opportunities that are opening up in Northern Ireland in hydrogen and clean technology. Those funds are doing a great deal of good. By working together, we will get the most out of these different spending streams.

The hon. Member for North Down asked a specific and very important question about section 75. We understand the importance of respecting the unique equalities considerations in Northern Ireland. We recognise the importance of not only meeting our legal obligations under the Equality Act 2010 but giving due regard to the additional equalities considerations that apply in Northern Ireland. I hope it is obvious from the tenor of my comments and from what I have said today that we are always—always—keen to have solutions that are felt to be fair by all communities and that see all communities working together.

I thank hon. Members, who have put forward genuinely important points in today’s debate. Over the coming weeks, we will work with other parts of the Government—represented here today—as well as partners across the UK, to finalise our policy development. Later in the spring, we intend to publish the full UK shared prosperity fund prospectus.

I hope I have got across in my comments the sense that our intent is not to go over the heads of anybody but to enable devolved Governments, local government and other partners to shape what is done in different parts of the UK and where the money goes, and to be involved in generating and contributing ideas at all levels, so that we can make the most of the opportunities that we collectively share. That is the tenor of where we are coming from on this entire agenda.

Once we have done that—we will be doing it, as Members can probably tell from the meetings I have talked about that are under way or that are forthcoming— we will publish the full UK shared prosperity fund prospectus. We want to try to keep the process as simple as we can so that we can give local partners the information they need to begin investment planning. I genuinely look forward to working with hon. Members from across this House; a number of them have already come to me with important suggestions and ideas about things we can do on this agenda. I look forward to working with all Members who are here today to deliver on our shared ambition.