Stick to promises on Shared Prosperity Fund, government urged

16.11.22

NPP and researchers at PACE, Teesside University’s policy unit, are urging the Government to stick to its manifesto commitment on the Shared Prosperity Fund in tomorrow’s Autumn Statement.

Evidence shows that regional economic development programmes work.

An analysis of more than 600 regeneration projects over a 10-year period found they typically generated £2 for every £1 spent[1]. Other research found that the European Regional Development funds have been successful in boosting local growth in the UK, particularly in poorer regions[2] [3].  

Most recently, the Government has commissioned overall evaluations of the latest round of European funded programmes such as those managed and coordinated by Tees Valley Mayor and Combined Authority. The interim evaluations find that these programmes, which cover everything from skills to infrastructure, have been delivered effectively, have achieved their targets, and are valued by the people and businesses who have taken part in them[4] [5].

However, in the past, governments have tended to see regional development programmes as an add-on to national policy, but not essential, targeting them for cuts when public spending is tight or when a government less committed to regional policy is in power.

Previous research by PACE and NPP showed that the North of England was already losing £331m compared with the previous EU funded programmes[6]. Due to the high inflation environment, ongoing and proposed projects paid for with existing levelling up funds are likely to be scaled back even further.

Given the UK economy is likely heading into difficult and uncertain times, it’s essential that government isn’t tempted to cut back on the Shared Prosperity Fund with its focus on skills and getting people into work.  Importantly, the government’s own evaluations found that these kinds of programmes work best when they build on previous success and expertise, meaning even delay or disruption to the SPF is likely to hamper progress in the future.

Case study: Step forward Tees Valley

Step Forward Tees Valley has been building the aspirations of some of the most marginalised and vulnerable people since 2016.  Working with people furthest from the labour market who are economically inactive or unemployed and facing multiple barriers to employment.  These barriers are wide ranging and include mental and physical health issues, financial worries, substance use, lack of skills and confidence issues.

Participants are supported to take part in volunteering and work placements as a stepping stone to moving into employment. Support continues beyond a successful placement, training activity or employment offer to ensuring that Step Forward enhances job sustainability and participant resilience.  The project has helped thousands of people and in the process helped millions of public money, mostly through universal credit payments while boosting the local economy by getting more people into work. Total tax-payer savings from a reduction in UC claimants as a result of Step Forward Tees Valley participants finding work is estimated to be £2,654,164 based on age-specific rates of the minimum UC level and sustaining jobs for one year.

Case study: Connecting Opportunities, Migration Yorkshire

Connecting Opportunities supports new migrants (largely from Ukraine and Hong Kong) living in Leeds City Region to develop the skills they need to gain employment in the UK, helping them to improve their English and feel part of the community. The service is free to participants and is funded by the European Social Fund and the National Lottery Community Fund

In the second phase of the programme (from 1 July 2019 to 31 March 2021), the programme generated over £14,520,000 of social investment – unlocking £12m from £2.3m funding – and up to £6.67 for every pound spent. Multiplied up across the six years of the project, the £7.5m funding has generated an estimated £50m of social investment.

At the start of October, Migration Yorkshire stopped taking new referrals and the programme will close for good in March when their funding comes to an end. Staff have started leaving to find new jobs, which has had an impact on the level of service they can provide.

Pictured: Papis secured a work placement at Cornerstone Supported Housing in Hartlepool through support from Step Forward Tees Valley.

[1] Tyler, P., Warnock, C., Provins, A., & Lanz, B. (2013). Valuing the Benefits of Urban Regeneration. Urban Studies, 50(1), 169–190.

[2] Di Cataldo, M. The impact of EU objective 1 funds on regional development: Evidence from the U.K. and the prospect of Brexit. J Regional Sci. 2017; 57: 814– 839. https://doi.org/10.1111/jors.12337.

[3] Marco Di Cataldo & Vassilis Monastiriotis (2020) Regional needs, regional targeting and regional growth: an assessment of EU Cohesion Policy in UK regions, Regional Studies, 54:1, 35-47, DOI: 10.1080/00343404.2018.1498073

[4] Department of Levelling Up, Housing and Communities: European Social Fund Annual Implementation Report (Updated 27 May 2021) https://www.gov.uk/government/publications/european-social-fund-annual-implementation-reports/annual-implementation-report-2018

[5] Department of Levelling Up, Housing and Communities: National Evaluation of English ERDF Programme 2014-20: Phase Two Report: Interim Impact Evaluation (January 2021)

[6] Northern Powerhouse Partnership (22 April 2022) Shared Prosperity Fund Shortfall Leaves a Gaping Hole at the Heart of Levelling Up https://www.northernpowerhousepartnership.co.uk/news/shared-prosperity-fund-shortfall-leaves-a-gaping-hole-at-the-heart-of-levelling-up/