Shared Prosperity Fund: Devolved Administrations

Deidre Brock Excerpts

Tuesday 1st March 2022 Westminster Hall

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

Thank you, Sir Edward. It is a pleasure to speak in this debate on the shared prosperity fund and the devolved Governments, and I pay tribute to the hon. Member for Belfast South (Claire Hanna) for bringing it forward and for setting out her case so comprehensively.

The Tory manifesto pledged a fair and equal share of funding that would fully replace EU support, which in Scotland would have been around £183 million per year. However, the Treasury Committee has already indicated, in a report published at the end of January, that the UK shared prosperity fund up to 2024-25 will be worth 40% less than EU support. In addition, all the power over the delivery of the funding is concentrated in Whitehall. There is no doubt that devolved Governments have been ignored. The Scottish Government as yet have no details of how much funding will be allocated to Scotland, nor has there been any consultation with Scottish Ministers, who have had no role in investment proposals or decisions in areas that are devolved to the Scottish Parliament.

The UK shared prosperity fund will replace the EU structural funds from next month, and still there has been no meaningful engagement with Scottish Ministers, or indeed those of other devolved nations. In January, the House of Lords Constitution Committee concluded that the UK Government continued to ignore devolution and the devolved Governments’ calls for greater transparency on decisions being taken with regard to levelling-up funding. With the publication of the shared prosperity fund pre-launch guidance this month, the role of devolved Governments and Parliaments is still completely unclear. The UK Government have chosen to work directly with local authorities, as presented in the guidance, and there is no evidence that they respect devolution or consider the Scottish Government, for example, an equal partner. Because the UK Government have also failed to offer any indication of Scotland’s shared prosperity fund allocation, or indeed how levelling up will align with the priorities of the Scottish Government, there is no overarching strategic thinking or planning in accordance with the Scottish Government’s priorities.

It is simply not respectful for the UK Government to seek the Scottish Government’s help in implementing projects after they have been selected by the UK Government. The Scottish Government, and all the devolved Governments, should be consulted at all stages, as was the case with EU funding. What possible objection could there be to that, unless the purpose is to undermine devolution? Although I appreciate that the Minister will tell us of the great munificence of the UK Government, it is also important to remember that in his last Budget, the Chancellor announced several direct funding programmes in Scotland through the levelling-up funding, totalling £172 million in spending. However, the rolling out of the levelling-up fund to communities around the UK short-changed the Scottish Government of expected Barnett consequentials, leaving a £400 million hole in the budget.

Delays to the delivery of post-Brexit funding—a year into Brexit—have already robbed poorer areas of £1.5 billion in funding, with the shared prosperity fund not set to deliver until April. When it is delivered, it will fall far short of previous EU funding. The reality is that Scotland will receive 3.5% of all levelling-up funding, despite having 8.2% of the UK’s population. Perhaps the Minister could explain that. The reality is that the Secretary of State for Levelling Up and the Prime Minister led a Brexit campaign promising £1.5 billion a year for Scottish devolved services when the UK left the EU. Instead, all we have heard is an announcement of £172 million. To put that into context, Scotland has received 11p for every £1 promised. In effect, Scotland has been short-changed by 89% of what was promised. I know the Minister will dispute this, but there is a growing consensus that the devolved Governments have been short-changed. The Treasury Committee says so, the House of Lords Constitution Committee says so, the Scottish Government say so, and the Unionist Welsh Government say so. They all agree that this is the case.

[Deidre Brock (Edinburgh North and Leith) (SNP)]

I want to raise the issue of Interreg with my hon. Friend, because the shared prosperity fund is touted as a replacement for EU structural funds, but the levelling-up White Paper makes no mention of Interreg. Interreg was very important to organisations such as the European Marine Energy Centre in Orkney, which works in collaboration with other partners and gets a lot of funding on the back of that in order to tackle really important common challenges in meeting our targets for net zero. Is my hon. Friend aware of that, and does she agree that it is essential that the funding is replaced?

[Patricia Gibson]

My hon. Friend makes an excellent point. The fact is that a number of organisations, including the European Marine Energy Centre, are very concerned about funding going forward, given the cuts to funding that I and many other speakers in the debate have talked about today.

Scotland has been short-changed and her Parliament undermined. I know the Minister thinks Scotland should be grateful, but the post-Brexit funding bonanza has not materialised and as a result important projects across Scotland and the devolved nations have been jeopardised. Scotland is the poorer for Brexit in so many ways. I hope the Minister will at least recognise the loss of funding that Scotland and the other devolved nations have suffered as a result and all the other concerns that he has heard about today. I really hope that when he gets to his feet, he will make a genuine attempt to address those concerns.

--- Later in debate ---

[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.