Row over support
Treasury insists new fund will ‘level up’ UK
John Swinney: ‘there will be more’ (pic: Terry Murden)
UK government ministers have been forced to defend a new Whitehall-controlled fund that will replace money previously allocated by Brussels.
The Treasury is setting up a UK Shared Prosperity Fund and has promised to match the £1.5 billion a year that has been provided by the EU.
European Structural Funds have been allocated locally to spend on various projects such as bridges and roads.
But Scottish government ministers have complained that Scotland will lose control of how the money is spent, claiming it is evidence of a “power grab” by Westminster.
While the SNP is turning it into a constitutional issue, other areas of the UK, including Cornwall and Yorkshire, have also expressed concern that they will lose out.
Stephen Barclay, Chief Secretary to the Treasury, has written to the Scottish Finance Secretary, Kate Forbes, explaining that the Shared Prosperity Fund will play a part in the “levelling up” agenda by directing money to where it is most needed. Details will be revealed in the next spending review.
Mr Barclay’s letter states: “The UK Shared Prosperity Fund will help to level up and create opportunity across the UK in places most in need.
“We will ramp up funding so that total domestic UK-wide funding will at least match EU receipts on average reaching around £1.5bn a year.”
SNP ministers insisted the new fund was part of a plot to rip up the devolution settlement.
Deputy First Minister John Swinney tweeted: “This is part of an orchestrated plan to undermine devolution. First the Internal Market Bill. Now the Shared Prosperity Fund. Both moves attack devolution. There will be more.”
Ms Forbes tweeted: “As feared. EU structural funds have been truly transformational for rural communities and infrastructure in the Highlands and Islands.”
There have also been reports that local projects in Scotland, particularly in rural areas, would lose out, a view shared across the UK.
After councillors in Cornwall expressed concern, Steve Double, Conservative MP for St Austell and Newquay, said they should stop their “constant whining” and spreading misleading information.
Sheffield City Region Mayor Dan Jarvis claimed that funding support would be substantially cut next year and that much of what is left will be taken back from local control to Whitehall.
UK government ministers admit the fund will be run from London, but say it will be at the same level and fairer to regions most in need.
The Chancellor announced in the Spending Review on 25 November that £220m will be allocated in 2021-22 as a pilot to help local areas prepare for the introduction of the UK Shared Prosperity Fund. He said: ‘This is a pilot scheme to look at how the SPF scheme might operate.
“The government will ramp up funding so that total domestic UK-wide funding will at least match EU receipts, on average reaching around £1.5billion a year.”