The importance of the UKSPF in light of the UK’s departure from the EU

As of 31 January 2020, the UK is no longer a member of the EU. We have now entered into the so-called ‘transition’ or ‘implementation period’, during which the UK is attempting to negotiate a free trade agreement (FTA) with the EU. The Treasury has pledged to underwrite all money that would have come to the UK from the EU in the period 2014–20. This includes the ‘run-on’ of EU funds, which refers to projects which were approved and funded as part of the 2014–20 cycle but whose life extends beyond 2020. This means that funding commitments made by the end of 2020 can involve spending that continues until the end of 2023 underwritten by the Treasury. There will, however, be no new money from the EU after the end of 2020.

The promise to, at a minimum, match the funds that currently come from the EU is a welcome assurance for charities in each nation. However the pledge on skills funding above does not specify whether this fund would be an annual amount or would be expected to cover the lifetime of this parliament, scheduled to close in 2024. It is essential that there is sufficient funding in any proposed UKSPF for disadvantaged communities and that there is not a disproportionate focus on capital expenditure. Given the figures above, it is imperative that the government provides clarity on the exact size of any proposed UKSPF in order to ensure that communities in need do not lose money on the ground.

Variations in EU funding levels and areas across the regions and nations of the UK mean that the impact of a potential non-replacement of funding could disproportionately affect certain causes or regions. Scottish charities, for example, received £25.1m in EU funding in 2015 compared to Welsh and Northern Irish charities, which received £1.2m and £1.4m respectively.

The funding charities in the UK have received from EU programmes has been critical to many of the most disadvantaged and vulnerable members of society often neglected by mainstream public services. It has been invaluable to the sector during years of austerity, helping to stop the gaps in prosperity from growing even wider.

However, the bureaucratic nature and delivery of EU funding has often impacted on the ability of providers to deliver programmes of support to their full potential. Many charities find that the stringent reporting requirements necessitate a great deal of time and resource being spent on administration rather than delivery.

With the UK no longer a member of the EU, the government has a once in a generation opportunity to develop a world-leading UKSPF that builds on the best aspects of EU structural and investments funding (ESIF) while addressing the design flaws which have led to excessive and unnecessary bureaucracy. This, in turn, will enable local actors – including civil society organisations – to play their part in the rebuilding effort after the pandemic.

The purpose of this paper is to set out a framework for how the UKSPF should replace EU funding in the most effective way and contribute to the recovery of the economy while tackling regional inequality.