Spending review

Holyrood demands control over new prosperity fund

Rishi Sunak at Tory conference 2020

The Chancellor will unveil his Spending Review next week

Scotland is expected to hear next week how crucial European Structural Funds will be replaced when the Chancellor unveils his Spending Review.

The Funds have provided £5.6 billion over the last 40 years to support key projects in Scotland, but these funds will not be available from the turn of the year when Britain finally leaves the EU.

Rishi Sunak is expected to announce the long-awaited UK Shared Prosperity Fund to replace the EU money, but details as to how it will be applied are unclear.

Scottish Trade Minister Ivan McKee last week expressed concern that two years since announcing its intentions the UK government had failed to engage meaningfully with the devolved nations, providing no detail on how such a replacement fund might work, how much funding will be available and what it will support.

He called for clarification of the UK government’s plans and confirmation that it will transfer full control over replacement funding to the Scottish Government. In the meantime Mr McKee has announced plans for a Scottish Shared Prosperity Fund.

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“We will now go on to develop the Fund involving key partners, especially local authorities,” Mr McKee said. “And we will continue to press the UK Government for full replacement of all lost EU funds – Scotland must receive at least £1.283 billion for a replacement seven year programme for 2021 – 2027.”

The Chancellor is also expected to announce a UK Investment Bank to replace the functions of the European Investment Bank, after the end of the Brexit transition period. It is not clear such a bank would sit alongside the Scottish National Investment Bank whose launch is imminent.

The UK government hopes to be able to use more private sector capital, and to align the UKIB’s investments more closely with UK economic strategy, for example on climate change.

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