Last week in The Orkney News we reported that the islands had lost out on vital financial support being short changed by the equivalent of nearly £619,000 through the allocation from the UK Government’s Shared Prosperity Fund. Orkney Loses Vital Funding in UK Shared Prosperity Fund

A statement from the UK Government’s Department for Levelling Up has said that the “Funding will match what was previously spent in Scotland. The funding delivers on the UK Government’s commitment to match the previous EU funding from the European Social Fund and European Regional Development Fund.”

The Scottish Government has calculated a sum of £162 million per year would be needed to replace the European Regional Development Fund and European Social Fund, increasing to £183 million per year when LEADER funding and the EU Territorial Cooperation Programmes are added in.

The UK Government’s Shared Prosperity Fund was supposed to replace the funding we used to get from the EU. Funding which you can see has been put to use across the islands building valuable infrastructure including piers.

£32 million has been allocated to Scotland for 2022-2023 – £151 million short of the £183 million estimated to be an appropriate replacement for EU Structural Funds.

The UK Government state: “The UK Shared Prosperity Fund will see places that need it most draw up plans this year to deliver on their local priorities, based on a conditional allocation of funding over the next three years. 

“The funding delivers on the UK Government’s commitment to match the previous EU funding from the European Social Fund and European Regional Development Fund…. local areas in Scotland will see £212 million made available under the fund. However, the fund will be much more flexible and locally led, freeing communities in Scotland from the bureaucratic, rigid and complex processes of the EU Structural Funds.”

The £212million is over a 3 year period:

• £32 million in 2022-2023
• £55 million in 2023-24
• £125 million in 2024-25.

The Scottish Government have said that if we had remained in the EU it is estimated that funding would have been £183 million this year. Orkney voted overwhelmingly to Remain in the EU in the 2016 advisory referendum. Every local authority area in Scotland voted Remain.

UK Government Secretary of State for Levelling Up Rt Hon Michael Gove MP said:

“We have taken back control of our money from the EU and we are empowering those who know their communities in Scotland best to deliver on their priorities.

“The UK Shared Prosperity Fund will help to unleash the creativity and talent of Scottish communities that have for too long been overlooked and undervalued.

“By targeting this funding at areas of the country that need it the most, we will help spread opportunity and level up in every part of the United Kingdom, including Scotland.”

There are many projects in Orkney which have benefitted over the years of membership of the EU with funding allocated locally.

The UK Shared Prosperity Fund by-passes the role of the Scottish Government. Business Minister Ivan McKee in the Scottish Government says this undermines the devolution settlement and does not recognise the authority of the Scottish Government in devolved areas.

Secretary of State for Scotland Alister Jack said:

“This £212 million investment is part of a comprehensive package of UK Government support to level up Scottish communities, and comes on top of a record block grant for Scotland.

“We will continue to work closely with local partners to ensure this money will go where it is most needed so people can be proud of where they live and work through delivery of new infrastructure, support for local business and by developing skills.”

Alistair Jack is the Conservative MP for Dumfries and Galloway. According to the figures from the Scottish Government his local area will lose out on nearly £4.1million of funding.

The allocation of money from The Shared Prosperity fund will now be decided by local councillors, MPs, businesses and voluntary groups. The formula used will be based on local population data, a broad based measure of need, including factors like unemployment and income levels. 

Orkney has one of the lowest rates of unemployment in Scotland.

Ivan McKee said:

“The UK Government’s Shared Prosperity Fund fails to deliver replacement funding which was promised to Scotland, meaning communities across the country will miss out on around £150 million of investment in 2022-23. This demonstrates exactly why Levelling Up means losing out as Scotland will receive considerably less funding than before Brexit.

“EU funding has supported infrastructure projects and community initiatives across the country since the 1970s, with Scotland receiving and delivering over £6 billion of EU Structural Funds. Transformational projects, such as the University of the Highlands and Islands and the European Marine Energy Centre in Orkney, have brought significant benefits to businesses and communities. It is hugely disappointing that future projects with as much potential may lose out.

“Since 2016 the Scottish Government has tried to engage constructively with the UK Government to ensure this Fund was delivered in a meaningful way, consistent with the devolution settlement and aligned with our national economic aims and ambitions. However, the UK Government has undermined devolution by failing to give the Scottish Government a decision-making role – which ultimately fails to meet the needs of Scotland’s communities.”

The UK Government has stated that throughout the UK the “UK Shared Prosperity Fund will be increased from £400 million in 2022/23 to £1.5 billion in 2024/25, at which point it will match the EU funds it has replaced.”

A selection of projects funded through the EU in Orkney

How the £151 million lost to Scotland would be broken down across Scottish local authorities on a pro-rata equivalent basis (figures via the Scottish Government):

Fiona Grahame