UK Shared Prosperity Fund Update
Argyll and Bute Council · 9 October 2025
Back to Policy and Resources Committee — 9 October 2025 and its agenda
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE DEVELOPMENT AND ECONOMIC GROWTH 9TH OCTOBER 2025 UK SHARED PROSPERITY FUND UPDATE 1.0 EXECUTIVE SUMMARY 1.1 The purpose of this paper is to update members of the Policy and Resources Committee on the UK Shared Prosperity Fund (UKSPF) Investment Plan 2022- 2025, activity in the final transition year 2025/26, plans for evaluation of the programme, and issues surrounding its potential replacement. 1.2 The UKSPF is a successor to the previous EU structural funds and is funded by the UK Government directly to local authorities across the UK. An initial UKSPF Investment Plan, comprising just over £4,000,000 of activity over 22 ‘interventions’ ran from 2022-2025. In 2025/26 a final, transitional year of funding was given at a 40% reduction from the previous years. Current indications are that there will be a further very significant cut in 2026/27, although there is currently not enough information to be sure what allocation, if any, Argyll and Bute Council will receive. 1.3 In February 2025, the Policy and Resources Committee approved a UKSPF Investment Plan for the transitional year to allocate c£1.4 million of funding. That paper also asked the committee to endorse a progress report on the transitional UKSPF Investment Plan for 2025/26 to be presented at the October 2025 committee meeting – this update is that progress report. 1.4 It is recommended that Members of the Policy and Resources Committee: • Note the content of this report. • Endorse that an evaluation of the lessons learned and initial impacts of the UKSPF is presented at the Policy and Resources Committee in August 2026.
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ARGYLL AND BUTE COUNCIL POLICY AND RESOURCES COMMITTEE DEVELOPMENT AND ECONOMIC GROWTH 9TH OCTOBER 2025 UK SHARED PROSPERITY FUND UPDATE 2.0 INTRODUCTION 2.1 The UKSPF is a successor to the previous EU structural funds and is funded by the UK Government directly to local authorities across the UK. An initial UKSPF Investment Plan, comprising just over £4,000,000 of activity over 22 ‘interventions’ (the terminology used to describe projects in the UKSPF) ran from 2022-2025. In 2025/26 a final, transitional year of funding was given at a 40% reduction from the previous years. Current indications are that there will be a further very significant cut in 2026/27, although there is currently not enough information to be sure what allocation, if any, Argyll and Bute Council will receive. 2.2 In February 2025, the Policy and Resources Committee approved a UKSPF Investment Plan for the transitional year to allocate c£1.4 million of funding. That paper also asked the committee to endorse a progress report on the transitional UKSPF Investment Plan for 2025/26 to be presented at the October 2025 committee meeting – this update is that progress report. 3.0 RECOMMENDATIONS 3.1 Members are asked to: • Note the content of this report. • Endorse that an evaluation of the lessons learned and initial impacts of the UKSPF is presented at the Policy and Resources Committee in August 2026. 4.0 DETAIL 4.1 In 2022 the UK Government published the full prospectus of the UKSPF, a successor to the previous EU structural funds. The overarching aim of the UKSPF is to build pride in place and increase life chances across the UK. The Investment Priorities were: • Communities and place; • Supporting local business; and • People and skills. 4.2 The initial UKSPF Investment Plan 2002-2025 interventions were subject to a robust competitive process, with proposals being scored according to an agreed matrix and approved by both Argyll and Bute Council and the UK Government.
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The activity in the transition year (2025/26) was comprised of extensions to interventions from the initial phase as these were already well-established, operating well, and had been subject to assessment. Therefore, delivering additional activity through these projects was seen to be the most efficient way of allocated funds given a very tight timescale for preparation of an investment plan. The transition year UKSPF Investment Plan is attached as Appendix A. 4.3 Since the approval of the UKSPF Investment Plan 2025/26 in February 2025, the council has received an updated memorandum of understanding, payment schedule and grant offer from the UK Government which has been accepted. Project partners in turn have been issued grant offer letters for their proposed activity by the council, which have also been accepted. 4.4 The extension of existing projects in the transition year allowed activity to continue seamlessly across financial years, which means projects have been delivering activity from the start of this financial year. The activity is extremely varied: employability support, capital projects delivering community spaces and sports facilities, support for extra-curricular activity in every secondary school in Argyll and Bute, work to develop tourism, the development of a robotics course at Scottish Association for Marine Science (SAMS). A particular highlight has been the work of the council’s Business Gateway team. By the beginning of August, just four months into the financial year, Business Gateway had allocated all of their budget for business support grants, demonstrating the availability of funding is limiting activity. 4.5 The interim reporting window for administration of the grant opens on the 1st October 2025, when spend to date and information on agreed outputs and outcomes will be gathered. 4.6 Work is currently commencing on an evaluation of the Argyll and Bute UKSPF programme as a whole, encompassing both the initial phase (2022-2025) and transition year (2025/26). The UK Government is likely to produce an evaluation of the UKSPF, and the programme itself included metrics for measuring outputs and outcomes of individual interventions. The proposed evaluation will consider the impact of the interventions on communities and organisations within Argyll and Bute. Using administrative funding provided as part of the UKSPF for this purpose, external expertise will be procured to undertake independent, qualitative research into the impact of the projects themselves. Following advice from the procurement team we expect to be able to tender for this contract in early 2026. 4.7 The evaluation will also include lessons learned during the UKSPF internally within the council, including considering how different parts of the council collaborated in its delivery, what tools worked best to enable working together, and the investment planning process. Examples of best practice and efficient working will be highlighted, as well as lessons learned. Undertaking the evaluation during the final months of the programme and its immediate aftermath will allow us to work with project partners and understand activity while it is still occurring, and this timetable will also allow any lessons learned to be taken forward to any UKSPF successor programme.
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4.8 Council officers have been submitting feedback directly to the UK Government (as well as collectively through organisations such as Scottish Local Authorities Economic Development (SLAED) Funding Group) on the running of the UKSPF programme, both as part of formal consultations and pro-active officer lobbying surrounding future funding streams. The evaluation of the UKSPF to be presented to the Policy and Resources Committee will contain a summary of that feedback. 4.9 News of a potential UKSPF replacement funding remains limited. The UK Government’s spending review on the 11th of June 2025 contained some information on the nature of the potential replacement, and further information has been gathered through formal and informal communication with the UK and Scottish Governments through collective bodies such as SLAED and COSLA. At present the following is known about the likely UKSPF successor: • Funding will remain in cash terms at the level of the transition year, which was a 40% cut from previous years. • This funding will remain at the same level in cash terms until 2028/29, which is a real-term financial cut. • Funding will have a stronger focus on capital, rather than revenue funding, in future years. • The funding will likely be separated into two streams, a ‘Local Growth Fund’, and a ‘Towns Fund’. The Towns Fund is an existing funding steam which will give funds to 350 deprived communities across the UK. It is unclear how these communities will be selected. • As the existing Towns Fund scheme is now to be counted under UKSPF funding, this likely represents a further real-term cut to the overall funding package. • The administrative mechanism for the funding is not yet known, and it is unclear what the role of the Scottish Government or Scottish Office may be. • No timescale has yet been given for any elements of the administration of the funding. • SLAED has represented to the UK Government that if further information is not forthcoming by October 2025 at the absolute latest, it will not be possible for local authorities to plan a strategic, efficient, and effective programme, and that this may lead to redundancies or reductions in services in some local authority areas as the UKSPF funding ends. 4.10 In addition to the above. on the 26th September 2025, the UK Government announced a £150 million ‘Pride in Place Impact Fund’ as part of the 2025 Spending Review to support communities across the UK, where eight local authorities across Scotland (Dundee City, East Ayrshire, Falkirk, Glasgow City, Inverclyde, North Ayrshire, North Lanarkshire and West Dunbartonshire) each received a £1.5 million allocation to be spent by March 2027. Argyll and Bute Council did not receive an allocation of funding as part of this scheme. The methodology for selecting areas was not undertaken through consultation but using a method incorporating information from the Community Needs Index and the Scottish Index of Multiple Deprivation. It is not possible to replicate this method using open data sets.
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4.11 It is understood that the funding for the Pride in Place Impact Fund will come from the budget of the UKSPF successor fund. This means that there is likely to be significant further cuts to that successor fund to pay for Pride in Place Impact funding. 4.12 It has been communicated that the remaining funds are likely to be used for the ‘Local Growth Fund’ which will be the main UKSPF successor, but at time of writing no detail is available on how this fund will work, or what the allocations will be. The UKSPF Transition year, 2024/25, represented a 40% reduction in funding from the original UKSPF programme. From the information we know, should the same allocation method be applied to the remaining successor fund to the UKSPF as was used previously, this would likely represent a further significant cut of circa 40%. This would have significant impacts both on the delivery of council activity and on the ability to fund external partner projects. 4.13 Council officers will continue to work proactively with partners and through organisations such as SLAED and COSLA to seek more clarity on future funding streams such as the ‘Local Growth Fund’. 5.0 CONCLUSION 5.1 The UKSPF transitional year projects continue to deliver at pace, with mid-year reporting to be concluded during October 2025. In addition to the ongoing administration and monitoring of the UKSPF, the UK and External Policy Team, Economic Growth, with third party assistance, will conduct an evaluation during 2026 to assess the lessons learned and initial impacts from the projects funded by the UKSPF from 2022. 5.2 Information on funding to replace the UKSPF is limited but there is an indication that there will be very significant real-term cuts in future. Limited information on replacement funding will lead to a tight timetable for its preparation and delivery which will have knock-on effects on both council officers and projects to ensure funding is delivered and spent in a timely manner. 6.0 IMPLICATIONS 6.1 Policy –the UKSPF Transition year aligns with the proposals set in the UKSPF full prospectus. 6.2 Financial – the transition year allocation is just over £1.4 million to be spent by the end of March 2026. This is accompanied by the ability to use up to 4% of the allocation to fund administration support for the delivery of the Argyll and Bute UKSPF Transitional Investment Plan, 2025/26. 6.3 Legal - all appropriate legal implications will be taken into consideration. 6.4 HR - given the revenue element of the funding, staffing requirements have been built in under activity to deliver the predefined interventions, outputs and outcomes. Staffing resources put in place to administer, monitor and evaluate the overall delivery of the Argyll and Bute Transition UKSPF Investment Plan
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are being supported for 2025/26. However, uncertainty over the UKSPF replacement and potential future cuts may result in reduced funding for staff capacity going forward. 6.5 Customer Service – none. 6.6 Risk - if proposals for an evaluation are not endorsed an opportunity could be lost to learn valuable lessons for the delivery of future programmes and to gather evidence which could be used in future to secure further funding. 6.7 Climate Change – a number of the projects being undertaken as part of the transition year UKSPF Investment Plan are delivering benefits to the environment and helping to mitigate the climate and biodiversity crises. 6.8 Fairer Scotland Duty - the Fairer Scotland Duty, Part 1 of the Equality Act 2010, came into force in April 2018. The duty places a legal responsibility on particular public bodies in Scotland, such as Argyll and Bute Council, to pay due regard to (actively consider) how they can reduce inequalities of outcome, caused by socio-economic disadvantage, when making strategic decisions and how this has been implemented. This has been considered as part of remaining implications below. 6.9 Equalities (protected characteristics) - all activities comply with all Equal Opportunities/Fairer Scotland Duty policies and obligations. 6.10 Consumer Duty - all activities comply with the council’s Consumer Duty. 6.11 Island Communities - interventions under the UKSPF are being delivered across the Argyll and Bute area, including island communities. 6.12 Children’s Rights and Wellbeing – none. Kirsty Flanagan, Executive Director with responsibility for Development and Economic Growth Policy Lead for Business Development: Councillor Math Campbell-Sturgess 2nd October 2025 For further information contact: Fergus Murray, Head of Development and Economic Growth Fergus.Murray@argyll-bute.gov.uk Ishabel Bremner, Economic Growth Manager ishabel.bremner@argyll-bute.gov.uk Kevin Grant, Senior Development Officer, UK and External Policy Team, Economic Growth kevin.grant@argyll-bute.gov.uk APPENDICES Appendix A: Argyll and Bute UKSPF Transitional Year Investment Plan
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Appendix A: Argyll and Bute UKSPF Transitional Year Investment Plan Note: Rules within the UKSPF require us to meet a minimum capitalisation threshold of £417,980. We will be permitted to transfer funds from revenue to capital but not vice versa. As a result, we have over-allocated the capital allocation and under-allocated revenue accordingly to ensure that minimum capitalisation thresholds are met and there is sufficient flexibility in the event of a capital underspend. The overall allocation is not over-committed. Project Priority Deliverer Total Capital Total Revenue Combined Total Admin Business Support Supporting Local Business ABC Bus Gateway 150,000.00 50,596.79 200,596.79 8,023.87 Community Hubs Communities & Place ABC Com Dev 80,000.00 80,000.00 3,200.00 Wider Achievement People & Skills ABC Education 37,500.00 37,500.00 1,500.00 Training People & Skills ABC Employability - 50,000.00 50,000.00 2,000.00 Work Placement People & Skills ABC Employability - 250,000.00 250,000.00 10,000.00 Vibrant & Living Places Communities & Place ABC Projects & Regen 100,000.00 - 100,000.00 4,000.00 Flexible Food Fund Communities & Place ABC Rev & Ben - 122,400.00 122,400.00 4,896.00 Digital Infrastructure Supporting Local Business AICT (Digital) - 12,000.00 12,000.00 480 Marketing Posts Communities & Place AICT (Marketing) - 42,000.00 42,000.00 1,680.00 Graduate Placement Supporting Local Business HIE 19,365.00 19,365.00 774.6 Graduate Aprenticeships Supporting Local Business InspirAlba 21,143.00 21,143.00 845.72 Supported Employment People & Skills InspirAlba - 116,123.00 116,123.00 4,644.92 Positive Destinations People & Skills TSI - 60,630.00 60,630.00 2,425.20 Adult Literacy & Numeracy People & Skills LiveArgyll - 102,124.00 102,124.00 4,084.96 Robotics Academy Supporting Local Business SAMS 116,022.32 87,000.00 203,022.32 8,120.89 Management & Administration - ABC UKEP 56,676.16 Total 446,022.32 970,881.79 1,416,904.11 56,676.16 Allocation 417,980.00 997,173.28 1,415,153.28 58,965.00 Balance Available -28,042.32 26,291.49 -1,750.83 2,288.84