2 - UK SPF Update 25-26
Renfrewshire Council · 18 March 2025
Back to Economy and Regeneration Policy Board — 18 March 2025 and its agenda
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___________________________________________________________________ To: Economy and Regeneration Board On: 18th March 2025 ___________________________________________________________________ Report by: Chief Executive ___________________________________________________________________ Heading: UK Shared Prosperity Fund 2025-26 ___________________________________________________________________ 1. Summary 1.1 This report provides an update for the extension year (2025/2026) of the Renfrewshire (and wider Glasgow City Region) UK Shared Prosperity Fund (UKSPF) allocations, following the confirmation of the budget from the UK Government. 1.2 Board are asked to approve the recommended breakdown of funds. ___________________________________________________________________ 2. Recommendations 2.1 Board members are asked to: a) Note the contents of the report and the Renfrewshire plan for UK SPF 2025-26; b) Approve the proposed breakdown of funding highlighted in section 7.2 of the report ___________________________________________________________________ 3. Background 3.1 The current UKSPF 3-year programme budget runs until 31 March 2025. The allocation across the Glasgow City Region (GCR) for the period was just under £74m with Renfrewshire’s allocation being £6,290,987. 3.2 The UK Government committed to a one year extension of the current UKSPF programme in their Budget Statement, 30 October 2024. While this extension year is welcomed, the quantum for the extension year was significantly less than the UKSPF budget for the current financial year (2024/2025). The total 2024 / 2025 UKSPF budget allocation was £1.5bn, the financial commitment for the extension year is £900m, equating to a 40% overall reduction.
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3.3 While this level of funding was confirmed in the UKG Autumn Budget Statement, individual regional / local authority allocations were not clarified until Friday 13 December 2024. ___________________________________________________________________ 4. 2025 / 2026 UKSPF Allocation Methodology 4.1 Part of the reason for the delay in the confirmation of the 2025/2026 budget was a change in the allocation methodology by UKG. While the overall Scottish allocation remained as 8.42% of the total UKSPF budget, not all Local Authority allocations were reduced by an equivalent amount. 4.2 The UKSPF 2025/2026 budget has been allocated by UKG using a six-step methodology (a summary of which is provided below); • Step 1: Set national quantums • Step 2: Capital allocation • Step 3: Revenue allocation • Step 4: Local authority level allocation • Step 5: Aggregate to lead local authority • Step 6: Reallocate reserved MCA budget 4.3 Step 1: New national quantums have been calculated using the average nation shares for core UKSPF 2022/2023 to 2024/2025, set at 8.42% for Scotland. As a result, the National Allocation for Scotland for the year 2025/2026 is £75,970,095. 4.4 Step 2: In Scotland and Wales, capital has been allocated based on historical local authority core UKSPF proportions. Each local authority receives an amount equal to their historical share multiplied by the new capital total. With the total Scottish capital allocation being £19,708,428 (26% of total allocation). 4.5 Step 3: Allocations have been adjusted to prioritise areas with the highest levels of deprivation, while ensuring funding in all places is high enough to remain viable. To measure the level of deprivation in individual areas these allocations used the most recent Index of Multiple Deprivation (IMD) for each nation, to identify the 20% of local authorities with the highest levels of deprivation. A ‘prioritisation adjustment factor’ was then applied. 4.6 Step 4: The full local authority allocation was determined by combining Steps 3 & 4. 4.7 Step 5: Regional allocations were then calculated based on the aggregation of individual local authorities. 4.8 Step 6: Was only relevant for English combined authorities.
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4.9 Following the methodology outlined under section 3.2, UKG have now contacted individual LA chief executives with confirmation of their 2025/2026 UKSPF allocations. After applying the revised allocation methodology, four LAs in the Glasgow city region have had their UKSPF budget reduced by 45% and four LAs have had theirs reduced by 20%. 4.10 Across the 32 Local Authorities in Scotland, the six most deprived (of which four are in the GCR) received the 20% reduction. It should be noted that as Multiply funding was not continuing in the extension year, the equivalent of the Yr3 Multiply budget was netted off prior to the 45% or 20% reduction being applied. Renfrewshire’s reduction is 45% (on 2024/25 levels) as it is not one of the four most deprived LAs in the city region. ___________________________________________________________________ 5. Proposed GCR Capital Allocation 5.1 In addition to the reduction in the overall UKSPF allocation for the extension year, there has also been a revision to the capital allocation. While the original indication from UKG was this would be a flat 26% across all LAs, this now also has an allocation based on deprivation. As with the initial three- year UKSPF programme, this is a minimum level of capital expenditure within the budget. 5.2 UKG have confirmed that those six local authorities across Scotland, considered the most deprived, and therefore received the 20% reduction, will also have a lower level of mandatory capital expenditure – at 21.4%, the remaining 26 local authorities will have a minimum capital expenditure of 28.4%. 5.3 This approach to the capital allocation will have a ‘double hit’ for the four LAs in the city region who don’t fall within the most deprived Local Authorities, as they have received a 45% reduction in their overall allocation and an increased minimum capital expenditure floor. It should be noted, as with standard accounting procedures, revenue budgets can be converted to capital expenditure, but not the other way round. 5.4 Due to the nature of the way UKSPF is managed in the GCR, one overall regional capital allocation (£6,868,820), with individual LAs notified of their own individual total, there is the opportunity for the city region and the LAs to manage the capital allocation in a more flexible manner. When GCR report expenditure to UKG, it is one report based on a cumulative summary of LA spend in that period. As a result, there is the opportunity for the LAs to each maintain a consistent level of capital expenditure across the eight. This would mean a 23.33% capital allocation for each LA. The split is outlined in Table 2. 5.5 This revised split was agreed at the GCR CEG and Cabinet Group in February 2025. ___________________________________________________________________
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6. Local Authority Allocations 6.1 Table 1 provides details of the confirmed allocation by LA, the total for the GCR and the variance from the Yr3 (2024/2025) total allocation. Table 1. 2025/2026 UKSPF Allocations 2024/25 Allocation Total (inc. Multiply) Full Allocation 2025 / 2026 Suggested Allocation Capital 23.33% 2025/2026 Allocation Revenue 2025/2026 Variance from Yr 3 total Member Authority E. Dunbartonshire £2,072,697 £1,159,173 £270,614 £888,559 (£913,524) E. Renfrewshire £1,929,328 £1,078,992 £251,895 £827,097 (£850,336) Glasgow City £15,951,695 £11,834,805 £2,762,883 £9,071,922 (4,116,890) Inverclyde £2,089,711 £1,550,389 £361,945 £1,188,444 (£539,322) N. Lanarkshire £8,133,224 £6,034,163 £1,408,699 £4,625,464 (£2,099,061) Renfrewshire £3,688,691 £2,062,930 £481,599 £1,581,331 (£1,625,461) S. Lanarkshire £7,166,203 £4,007,757 £935,627 £3,072,130 (£3,158,446) W. Dunbartonshire £2,284,294 £1,694,752 £395,647 £1,299,105 (£589,542) TOTAL £43,315,843 £29,422,961 £6,868,908* £22,554,053 (£13,892,88) ___________________________________________________________________ 7. Renfrewshire Council UK SPF 2025-26 7.1 Renfrewshire Council has a total allocation of £2,062,930 for 2025-26 of which £481,599 is the minimum capital spend; leaving £1,581,331 as the revenue allocation. 7.2 The proposed breakdown of the allocation is as follows: SPF Theme Capital Revenue Total People and Skills £0 £1,000,000 £1,000,000 Business £0 £581,331 £581,331 Communities and Place £481,599 £0 £481,599 Total £481,599 £1,581,331 £2,062,930 7.3 The allocation is significantly lower than the previous year and a fraction of what was available under the previous EU programme. Priority for funding has gone to the areas involving the continuation of staff and services where previous budgets have been cut.
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7.4 The allocation would support the continuation of existing employability and business development staff and activities and would facilitate additional capital spend under the Communities and Place theme. 7.5 A full plan for the year ahead is currently being developed for submission and will be outlined in more detail in a future board report. _________________________________________________________________ Implications of the Report 1. Financial – No additional funding is sought. All funding is accounted for within existing Council budgets and external funding. 2. HR & Organisational Development - funding secures the continuation of staff posts 3. Community/Council Planning – none 4. Legal – None. UK SPF is routed through the Glasgow City Region and formal relationships are established with them. 5. Property/Assets – None. 6. Information Technology – None. 7. Equality & Human Rights - The Recommendations contained within this report have been assessed in relation to their impact on equalities and human rights. No negative impacts on equality groups or potential for infringement of individuals’ human rights have been identified arising from the recommendations contained in the report. 8. Health & Safety – None. 9. Procurement – None. 10. Risk – None. 11. Privacy Impact - None. 12. Children’s Rights - None 13. COSLA Policy Position – Not Applicable. 14. Climate Risk – Not Applicable. __________________________________________________________________ List of Background Papers Economy and Regeneration Policy Board, 23rd August 2022, “UK Shared Prosperity Fund Update”
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Economy and Regeneration Policy Board, 23rd May 2023, “UK Shared Prosperity Fund – Year 1 Report” Economy and Regeneration Board, 7 November 2023, “Shared Prosperity Funding: Business Challenge Fund” Economy and Regeneration Board, 5 November 2024, “Shared Prosperity Fund Update” ___________________________________________________________________ RC 20/02/2025 Author: Ruth Cooper, Economic Development Manager; Email: ruth.cooper@renfrewshire.gov.uk