Elected Member Briefing - UK Shared Prosperity Fund

About this briefing note

Report by: Sharon Rice-Jones, External Funding, Monitoring and Performance Team Leader

Date: 3 July 2023

Subject: UK Shared Prosperity Fund

Responsible Officer: David Littlejohn, Head of Planning and Development

Details

Purpose

This Briefing note has been prepared to provide an update on the UK Government's UK Shared Prosperity Fund. 

Briefing information

Introduction

The UK Shared Prosperity Fund (UKSPF) is the UK Government's replacement for the EU structural funds and is a central pillar of the UK Government's Levelling Up agenda, and a significant component of its support for places across the UK. It provides £2.6 billion of new funding for local investment by March 2025, with all areas of the UK receiving an allocation from the Fund via a funding formula rather than a competition. It is designed to help places across the country to deliver enhanced outcomes and recognises that even the most affluent parts of the UK contain pockets of deprivation and require support.

Through the Fund, areas are empowered to identify and build on their own strengths and needs at a local level, focused on pride in place and increasing life chances. Local places will be able to use the Fund to complement other funding options and mainstream employment and skills provision to maximise impact and simplify delivery. A Local Partnership Group is required to be established as part of the governance framework.

The Fund's interventions have been planned and now delivered by councils and mayoral authorities across England, Scotland, and Wales referred to as lead local authorities. The expectation is that they work closely with local partners and the Scottish and Welsh Governments.

Headlines

• Fund launch: 13 April 2022
• Perth & Kinross 3-year total allocation = £5.72M (2022/23 to 2024/25)
• Previous EU Structure Funds allocated to Perth and Kinross totalled circa £7.1million (ERDF £1.4million, LEADER £4.3million and ESF £1.4million) over 5 years. Both ERDF and ESF required match funding.
• A high-level Investment Plan, informed by the priorities in the Economic Wellbeing Plan together with broad Expressions of Interest was submitted on 1 September 2022.
• First payments were expected to be made to lead local authorities in October 2022. However, PKC received its year 1 allocation on 27 January 2023.  This delay was due to ministerial changes in the UK Government.  These significant delays prevented the start of the allocation of funding for year 1 which closed on 31 March 2023.
• Allocations for year 1 have now been profiled against year 2.
• The year 2 funding itself has not yet been received.
• New funding period: April 2022 to March 2025

Consultation & Partner Engagement for the Investment Plan

• Elected Members were issued a Briefing Note on 22 June 2022 about the Levelling up Fund, Shared Prosperity Fund and Key Funding Sources for Community organisations. Elected Members received a second Briefing Note on 23 August 2022 combined with an opportunity to attend a presentation specifically on the Themes and process for UKSPF.
• Workshops involving PKC officers took place 13-15 July 2022 confirming priority areas of support based on the Wellbeing Plan including specific support for community projects. 
• Regional discussions with officers across the Tay Cities Region also took place to identify potential regional scale collaboration projects.
• Local stakeholders (e.g., Economic Wellbeing Taskforce and various partnership groups) were consulted on 24 August 2022 and have influenced the Investment Plan contents. 
• Expressions of Interest (EOIs) were received with strong focus on Communities & Place and Local Business support interventions. As European Social Fund employability projects will wind down it is expected that new People & Skills and new Multiply projects (focusing on Numeracy skills) will be developed.

The UKSPF Investment Plan & Perth and Kinross Investment Plan

• The basis for the Perth and Kinross Investment Plan is the approved Economic Wellbeing Plan an update on which was presented to the Council on 27 April 2022. For more details see EWP Report and Economic Wellbeing Plan. The approach builds on the themes and priorities within the Wellbeing Plan, targeting those actions which also meet the objectives of the Shared Prosperity Fund. Identified priorities are to boost and accelerate those projects which can make a positive economic impact. In terms of specific themes these are clean growth development (to support Net Zero ambitions); revitalising places; supporting local businesses; and ensuring people have access to the skills required in the future. 
• In line with the strategic guidance of the UK Government the development of some projects at a regional scale with Tay Cities Region partners was explored focusing on digital skills, and business development. 
• To support the Communities & Place theme a Challenge Fund will be introduced to allow community organisations to bid for a share of the funding. 
• The Investment Plan sets out local challenges and opportunities and the main areas of focus for the use of the funds, supported by initial expressions of interest which informed the interventions. The Investment Plan has clear outcomes and objectives that link back to the approved Economic Wellbeing Plan. 
• After final comments were received, the Investment Plan (UKSPF Application Form) was submitted in September 2022 after it had been signed-off by the Chief Executive and the Head of Finance. MPs Pete Wishart and John Nicolson were also sent a copy and supported the submission as required. 
• Now that the Investment Plan has been approved, Expressions of Interest will be developed further, and Offers of Grant issued should the UKSPF team be satisfied with their contribution to the overarching objectives of the Fund.
• There will be further opportunity to seek additional Expressions of Interest as the programme progresses.

The Grant Award Process 

• Engagement between June and August 2022 resulted in 40 Expressions of Interest received with 31 progressing to full application. 
• The process for assessment aligns with standard structure fund governance built on the robustness of the EU structural funds which Internal Audit have supported:
  •  Application Technical Assessment - to ensure eligibility, alignment with Perth and Kinross Priorities, clear outputs, and outcomes against the UKSPF Interventions, clear evidence of need and community priorities, Subsidy Control Evidence, Financial checks, applicant's ability to deliver, legal entity, statutory consents, procurement policy and evidence of costed plans supported by a Bill of Quantities or supplier quotes, clear financial and delivery milestones etc. This is undertaken by the External funding team officers.
  • Local Partnership Group - taking account of any Conflict of Interest the group will be furnished with the Technical Assessment, applications, and any relevant documents. Independently each representative will undertake a quality scoring assessment against a set of criteria including assessment for equality, environment, sustainability etc will take place by the end of July. 
• This Local Partnership Group will vote whether to recommend approval, the amount of grant offered and apply any conditions. 
• Once approved the Grant Offer Letter or SLA (as appropriate) will be issued working closely with the Communities Finance Team.
• Each Project will be monitored and supported intensely by the External Funding Team to ensure they meet financial, delivery milestones, outcomes, and outputs. Any slippage would be allocated to other waitlist projects to ensure full spend via Change Requests to the UK Government UKSPF Team. Aligning with PKC financial processes grants will not be allocated in a lump sum, they will be paid upon evidence of eligible delivery and defrayal to ensure clear performance and monitoring can be undertaken.

The Local Partnership Group

• For the purposes of the UKSPF, the required The Local Partnership Group for the ratification of the approval of funds will be the current Economic Wellbeing Taskforce which is the most representative group of wider stakeholder groups. The guidance requires representatives to be drawn from various stakeholders and individuals with key expertise. The first meeting will take place at the end of June/ early July.
• The Economic Wellbeing Plan is itself currently being refreshed to take account of the changed post-pandemic economy and the Council's Corporate Plan priorities. Consequently, membership of the Taskforce may change.
• UK Shared Prosperity Fund Prospectus

Other Funding Sources

The UKSPF provides a smaller resource to PKC and partners than the previous structural funds, and therefore the UK Government encourages alignment with other funds to maximise investment. Although not essential, match funding is positively encouraged, and as a result the External Funding Team will work on developing a match funding bank and build knowledge of projects and programmes which the Council has a funding short fall to help progress priorities. In addition, the Team will continue to work in partnership with local Communities and Organisations to enable locally led development, and support will be progressed in line with the Perth and Kinross Offer.