Institute suggests rolling over existing allocations and rules for another year
The Coronavirus pandemic could delay the government’s planned Shared Prosperity Fund even further, the Institute for Fiscal Studies has warned.
Researchers are hoping the fund will support R&D capacity-building after the UK leaves the European Union, compensating for the loss of benefits the sector gains from EU structural funds. These are expected to have provided €2.3 billion (£2bn) per year to the UK between 2014 and 2020.
However, the government has so far given few details around its scale, design and implementation.
In its report—Shared prosperity? Options and issues for the UK Shared Prosperity Fund—the IFS warns that UK arrangements for the fund would need to be in place before the end of the year, when the UK formally leaves the EU.
“If the pressing situation with the Covid-19 crisis means that it is impractical to finalise and consult on full details of the UKSPF, then the government could roll over existing allocations and rules for another year,” suggest authors Alex Davenport, Samuel North and David Phillips.
They also note that the social and economic effects of the Covid-19 crisis could “differ significantly between regions in ways not reflected in standard measures of regional and local economic disadvantage”.
Therefore, they add, a key decision is “whether to adapt the UKSPF so that one of its objectives is to support parts of the country that are struggling to recover from the Covid-19 crisis, or that potentially have other more targeted programmes and funding for this task”.
The report also makes a number of recommendations on how to design the fund. For example, it says a new UK system should be “more transparent” and avoid replicating “arbitrary” economic productivity cut-off points for allocating funding seen in the EU funds.