Why the shared prosperity fund is important for rural estates and farms
The UK Industrial Strategy Shared Prosperity Fund could become an important source of funding for UK rural estates and farms over the next decade, as access to EU rural development grant support is withdrawn after Brexit.
Why will the Shared Prosperity Fund be important?
After the UK leaves the European Union, rural businesses will no longer have access to EU Structural and Investment Funding (ESI funding), which has been worth a total of about €2.4bn a year. This is funding which has aimed to support economic development within EU member states, by financing support for businesses, employment and agriculture, and is administered by the different nations of the UK.
For farms and estates, the most visible element of the funding has been the rural development programmes of the four countries in the United Kingdom:
- The Rural Development Programme for England (RDPE), which funds the Growth Programme, the Countryside Productivity Scheme, Catchment Sensitive Farming, Countryside Stewardship and LEADER.
- The Scottish Rural Development Programme, which funds the Knowledge Transfer and Innovation Fund, Less Favoured Area Support Scheme, Forestry Grant Scheme, Agri-Environment Climate Scheme, Beef Efficiency Scheme, New Entrants, Crofting Agricultural Grant Scheme, Small Farms Grant Scheme, Food Processing, Marketing and Cooperation, Broadband and LEADER.
- The Welsh Government Rural Communities – Rural Development Programme, which funds Knowledge Transfer & Innovation Scheme, Glastir, European Innovation Partnership (EIP) Wales, Sustainable Production Grant, Farm Business Grant, Food Business Investment Scheme, Rural Business Investment Scheme – Food, Rural Community Development Fund, Co-operation & Supply Chain Development Scheme, Sustainable Management Scheme, Timber Business Investment Scheme, Co-operative Forest Planning Scheme, Glastir Woodland Creation/Restoration/Management, Tourism Amenity Investment Support, Micro Small Business Fund, Tourism Product Innovation Fund, Regional Tourism Engagement Fund and LEADER.
- Northern Ireland Rural Development Programme, which funds the Environmental Farming Scheme, the Agri-Food Co-operation Scheme, Business Development Groups, Forestry Grant Schemes, Farm Business Improvement Scheme, Agri-food Processing Investment Scheme, Farm Family Key Skills, Rural Tourism and LEADER.
Grants on offer through these schemes have typically covered up to 40% of the eligible costs of a project, enabling many farms and estates to develop food processing businesses, diversify into rural tourism or invest in farm equipment that improves their competitiveness.
The government has pledged support “to reduce inequalities between communities across our four nations” will continue after Brexit, but it will be delivered via a new UK Industrial Strategy Shared Prosperity Fund.
What do we know about the fund?
Unfortunately, no details are yet available about how the fund will work.
Although the government initially promised to consult on its design in 2018, this is yet to happen and according to a recent House of Commons briefing paper, full details may not emerge until the Spending Review report is published alongside the Autumn Budget (date is yet to be set).
A critical question will be the overall size of the funding pot. While in theory it would be possible simply to redirect all the money currently going to the EU into the shared prosperity fund, in practice this is thought to be unlikely because there will be so many competing demands for this money. It is unclear whether there will be any rural specific funds. Defra has said that it would like to open a new farming productivity fund after 2021 – again, there are no details yet.
