Tackling geographical inequalities is critical for ensuring that all parts of the country have the potential to prosper. When the UK was a member of the European Union, it was entitled to a share of funding from the EU’s structural and investment programmes. The UK government and devolved administrations used these pots of funding to support communities in the country’s most deprived regions.

Now that the UK has left the EU, the government has replaced these European funds with the UK Shared Prosperity Fund (UKSPF) , which provides combined authorities, districts, and unitary authorities (collectively known as lead authorities) with funding for communities, places, business, people and skills.

Targeting ‘left-behind’ areas

One of the key aims of the UKSPF is to target those places most in need. These ‘left-behind’ areas have deep-seated and long-standing high levels of deprivation. Their residents have lower skills levels, higher unemployment, longer public transport journey times, lower pay and poorer physical and mental health outcomes than the national average, and even than other deprived areas.

In addition, left-behind areas have insufficient social infrastructure – the connections, organisations and spaces to meet that enable communities to make positive changes for themselves. And many people living in these neighbourhoods feel disconnected or excluded from decisions that are made about how investment is directed in their communities.

Analysing the UKSPF’s performance

The UKSPF was launched in 2022, and was regarded as a major opportunity to overcome these issues. At the start of 2024, a report from the All Party Parliamentary Group for Left Behind Neighbourhoods presented its findings on how the UKSPF has affected England’s most deprived neighbourhoods.

Funding for left-behind areas

The analysis, published by Local Trust,  finds that, while the UKSPF allocation formula does take deprivation into account, the spread of national distributions does not appropriately account for levels of community need – or deprivation, across the board. As a result, neighbourhoods that are in greatest need have not received the levels of funding required to tackle disparities in life outcomes and improve pride in place.

Tight bidding turnarounds

The report explains that lead authorities were given just over three months to submit their investment plans for a share of UKSPF funding. It suggests that this tight timeline put pressure on lead authorities to prioritise speed rather than need in their development. It also gave lead authorities little time to encourage genuine community engagement and consultation, or to build new networks with local organisations that might not otherwise become involved.

Funding town centres and responding to crises

Many left-behind areas feel that they have been neglected, in contrast to the funding of social and community projects for town centres and high streets. This report finds that several local authorities used UKSPF funding to top up existing town centre projects. While the report acknowledges the need to fund the regeneration of high streets, it underlines the importance of improving the outcomes of residents in places that are most in need, in line with the UKSPF’s aims.

The research also found that some lead authorities were using UKSPF funding to support people experiencing hardship because of the cost-of-living crisis. One local authority, for example, directed the funding to boost its community food pantry provision for local residents. The report’s authors are not critical of using UKSPF funds to support vulnerable people, but it notes that diverting funds in this way will not achieve genuine community transformation in left-behind neighbourhoods.

Community involvement

Embedding more meaningful community involvement in local levelling up investment is a key part of the new approach proposed for the UKSPF. However, the Local Trust report finds that many of the lead authorities containing left-behind neighbourhoods made no provision for community engagement in their investment plans:

“Local Trust heard from people who are working in communities, delivering UKSPF funded programmes. They reported that there had been very limited consultation by lead authorities, including consultation only with those voluntary and community organisations they already had an established relationship with; other community organisations had made efforts to find out more, but were finding it difficult to get information or to receive a hearing.”

Examples of good practice

Despite these disappointing findings, the report also highlights examples where lead authorities have played an effective part in the UKSPF process. Boston in Lincolnshire and North Northamptonshire ran extensive public consultations to encourage local engagement with their UKSPF bids. Kingston upon Hull, which contains eight left-behind areas, saw UKSPF is an opportunity to push funding to these neighbourhoods, rather than focusing on the city centre. And six of the lead authority investment plans or executive reports analysed by the research identified the unique and intersecting challenges specifically faced by residents of left-behind neighbourhoods.

A blueprint for a better UKSPF

The report concludes with a call for a reinvented funding model for the UKSPF, based on five recommendations:

• Target hyper-local investment at ‘left-behind’ neighbourhoods
• Confirm UKSPF funding over the long-term
• Delegate UKSPF down to the community level
• Build in a ring-fenced capacity-building budget to the communities and place strand
• Make community involvement in ‘local partnership groups’ mandatory, in the absence of devolution
  

Final thoughts

The need to fund improvements for areas that for too long have been regarded as left-behind has never been greater. This report underlines the potential for the UK Shared Prosperity Fund to make a real difference to these neighbourhoods, and highlights some examples where local authorities are developing communities most in need.

However, the report also points to the missed opportunities which have resulted in many of the most deprived areas yet again being neglected. It remains to be seen whether the recommendations in the report are adopted, and if this new approach to investment and the empowerment of local communities is given the chance to realise its full potential.

Our colleagues in GrantFinder continually monitor for new open calls for projects to be funded under UKSPF allocations. There are also thousands of alternative funding opportunities on the GrantFinder database for local communities and the VCSE sector across the country, as well as small businesses.

Photo by micheile henderson on Unsplash

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Further reading: more on levelling up and regional development from The Knowledge Exchange blog

A better place for everyone: how investing in social infrastructure could be the key to levelling up

Levelling up: can charities get a piece of the action?

Shared Prosperity Fund – greater productivity and inclusivity for Scottish cities?