Regional funding after Brexit: Opportunities for the UK's Shared Prosperity Fund
Regional inequality is a dominant feature of the UK’s current economic landscape. Power and prosperity are concentrated in London and the South East, while other areas of the UK experience lower levels of output and productivity. Poverty and inequality still exist in London, but such a concentration of wealth is not found in any region outside of the capital.
The UK’s forthcoming departure from the European Union brings uncertainty over the future of funding allocated to the nations and regions of the UK. EU regional policy provides significant investment in the form of European structural and investment funds (ESIF). After Brexit, the UK will need to continue to give targeted support and investment into regions with lower levels of growth and higher levels of poverty, or it risks worsening the geographical divide.
Despite the uncertainty, leaving the European Union also brings an opportunity: a chance to redesign regional funding and create sustainable and inclusive regional economies. The government has named the ESIF replacement as the ‘UK Shared Prosperity Fund’ (SPF) – a fund committed to tackling inequalities between communities by raising productivity in areas of the country that are ‘furthest behind’.
This briefing aims to outline three challenges facing the UK: regional inequality; centralisation of power; and a lack of community voice. It then provides recommendations for how the Shared Prosperity Fund could be designed effectively to tackle these problems.