Holyrood demands control over new prosperity fund
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.
“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.
The chancellor also confirmed the Treasury will move some staff to a new base in the north of England next year, as part of a shift of 22,000 civil servant roles out of London and the South East. The location of the offices will be announced “in the coming weeks”.
Among other announcements likely next week is major reform to the way the Treasury assesses the value for money of government investments in big projects.
This involves the Treasury’s Green Book – a set of rules used to determine the value generated by government schemes.
It has acknowledged that those calculations have favoured investment in the South East of England and London because the values of economic return are influenced by existing high property prices in those regions.
The new process will update the equation to prioritise investments with regional impact, which help Mr Sunak’s levelling up plan and the government’s green objectives.
Mr Sunak is expected to allocate £1.6bn to tackle potholes in the country’s roads.