UK Shared Prosperity Fund: accounting officer assessment
Updated 30 October 2024
Background and context
The UK Shared Prosperity Fund (UKSPF) Heads of Terms were published at Spending Review 2020, when it was confirmed that the Fund would ramp up to £1.5 billion per year by 2024-25. The following year, at the Spending Review in October 2021, the Chancellor confirmed the fund would be worth over £2.6 billion over a 3-year period.
In February 2022 the Levelling Up White Paper was published, setting out the government’s intention to improve livelihoods and opportunity in all parts of the UK. The UKSPF is a central pillar of the Levelling Up agenda and the UKSPF prospectus was launched on 13 April 2022. It confirmed local allocations for investment by 31 March 2025, with all areas of the UK receiving an allocation via a funding formula rather than a competition. This recognises that even the most affluent parts of the UK contain pockets of deprivation and need support.
The UKSPF will act as the successor to the European Regional Development Fund (ERDF) and European Social Fund (ESF). The Fund has been designed to provide a degree of continuity and an increased level of local leadership as the UK transitions to a domestic approach. The Department for Levelling Up, Housing and Communities (DLUHC) will be accountable for the overall implementation of the Fund, working in partnership with a range of UK government departments, including the Department for Education (DfE) which will lead the Multiply element of the Fund in England. By taking a strategic and collaborative approach the UKSPF provides an opportunity to deliver efficiently and effectively targeting local priorities.
The prospectus sets out how funding will be delivered across the UK and how an investment plan will be developed for all parts of the UK. The Fund’s interventions will be planned and delivered by councils, and mayoral authorities in England and regional groupings in Scotland and Wales - ‘lead authorities’, working closely with local partners and the Scottish and Welsh governments.
In Northern Ireland, DLUHC will work closely with local partners to design a Northern Ireland investment plan that reflects the needs of Northern Ireland’s economy and society.
Assessment against the Accounting Officer Standards
Propriety
The Fund is focused on building pride in place and increasing life chances and will be delivered through three investment priorities: communities and place, local businesses and people and skills. Engagement with partners, including local government and the devolved administrations informed the development of the funding methodologies, specific to each nation.
The UKSPF funding methodology ensures a degree of continuity as the UK transitions away from EU funding while targeting need and using rational and relevant criteria to meet the policy objective.
As all areas received an allocation via this funding methodology there was no need to have any recusal process in place.
Overall assessment
My assessment is that the propriety test is satisfied.
Value for Money
The interventions available through the programme have been considered in the programme business case and benefit cost ratios have been constructed from the appraisals of each investment priority in order to assess value for money. DLUHC officials have worked with subject matter experts across government, with the devolved administrations and with local government representatives, to include key considerations around the strategic rationale, the case for intervention and evidence available to support the “what works” and ‘value for money’ cases.
Whilst DLUHC has completed a programme-level assessment of the strategic fit and evidence base of these interventions, it is not possible to achieve a robust and definitive assessment of their value for money at project-level as this will differ on an individual project and place basis.
Where local authorities wish to deliver ‘bespoke’ interventions they will provide evidence that these projects will deliver value for money. Off-menu interventions will be subjected to a more detailed assessment by DLUHC and relevant other government departments (where appropriate) to ensure strategic fit, value for money and deliverability are assured to a satisfactory degree.
As the programme is fully delegated in England, Scotland and Wales, local authorities will have a duty to ensure value for money at the project level. In Northern Ireland this responsibility will sit with DLUHC.
To further safeguard value for money, reporting and evaluation requirements placed on grant recipients will assist in monitoring the delivery of expected outputs and outcomes. These requirements are set out in Section 9 of the UKSPF prospectus and further information will be included in the monitoring and evaluation guidance which will be published by autumn 2022. The department retains the option to defer, reprofile or deny subsequent grant payments where authorities fail to meet agreed milestones and would request underspends to be returned to the department.
Overall assessment
My assessment is that the value for money test is satisfied.
Feasibility
Investments will be selected from the ‘menu of options’ and Investment Plans will be subject to an assessment process within DLUHC prior to any funding being provided to local areas. The feasibility of individual projects will be assessed by local authorities.
Where local authorities choose to take forward bespoke interventions, they will be subject to a more rigorous assessment by DLUHC including input from other government departments where appropriate to ensure that they are feasible and achieve the policy objectives.
The UKSPF prospectus (Section 9) sets out the requirement for local authorities to provide regular qualitative and quantitative progress reports, providing the department an early indication of places that are under-performing or at risk of doing so. This will enable the department to work with affected places to take steps to improve performance. This may also result in reduced delegation, reduced payment periods or withholding of funds in the affected area.
Overall assessment
My assessment is that the feasibility test is satisfied.
Regularity
DLUHC holds the power to provide the funding to deliver the programmes objectives through Section 50 of the United Kingdom Internal Market Act 2020. The required HMT approval has been provided through the programme business case and it is affordable within budgets.
In England, Scotland and Wales, programme delivery will be fully delegated to local authorities.
In Northern Ireland, responsibility for compliance with UK law will sit with DLUHC, including subsidy control, procurement, data control and equality duties.
No additional legislation is needed for the programme as it will operate within the existing UK legal framework.
Overall assessment
My assessment is that the regularity test is satisfied.
Conclusion
The UKSPF programme business case was reviewed on 9 March 2022 and deemed to be a robust and effective use of public resources.
This summary confirms that the programme has met the tests set out in Managing Public Money and outlines the key points which have informed my decisions to date. If any of these factors change materially during the lifetime of the programme, I undertake to provide a revised summary, setting out my assessment of them.
This summary will be published on the government’s website (GOV.UK). Copies will be deposited in the Library of the House of Commons; and sent to the Comptroller and Auditor General and Treasury Officer of Accounts.
Jeremy Pocklington
26 May 2022