The UK Shared Prosperity Fund? - Part 2

Policy Officer Aidan Campbell blogs on the EU Structural Funds and their proposed successor post-Brexit the UK Shared Prosperity Fund.

Part 1 of this blog looked at the EU Structural Funds in Northern Ireland and the origin of the UK Shared Prosperity Fund.  In Part 2 Policy officer Aidan Campbell discusses some of the rural considerations for the development of the UKSPF.

Although the proposed UKSPF is much wider than the current rural development programme and aims to replace all the various strands of EU Structural Funds we are primarily interested in the rural development strand.  The first question is whether a focus on productivity is the place to start in re-designing a rural development policy or programme for Northern Ireland.  In economic terms:
“Productivity is the key source of economic growth and competitiveness. A country’s ability to improve its standard of living depends almost entirely on its ability to raise its output per worker, i.e., producing more goods and services for a given number of hours of work.”

RCN would argue that the focus of any future rural development programme should be on social inclusion and ensuring that communities and citizens who had been left behind in rural areas are supported to become more connected into social and economic development. 

If we were agreed that raising productivity is the right objective to pursue to tackle inequalities we could still get into a heated debate over how to do it.  Will raising productivity be best achieved by investing in infrastructure like roads, telecoms etc. or by investing in rural childcare, or in better funding for all primary school children?  It’s probably desirable to invest in all three but we’re told that times are tight and that “hard choices have to be made”. 

Northern Ireland has long been behind the curve in terms of productivity and economists such as Dr. Esmond Birnie have explored the gap as has Paul MacFlynn of the Nevin Economic Research Institute.  A NERI working paper identified some of the reasons why some sectors of the NI economy lag behind their British counterparts.  So the stated objective of the UKSPF of raising productivity will be a tough nut to crack in NI. 

If the headline objective of the UKSPF is to raise productivity in the region as a whole that could be achieved by focusing on productivity gains in certain sectors and geographical areas.  For example, economists have identified particular challenges in raising productivity in the agricultural sector due to the high proportion of small and part time farms here compared to Britain. 

The current Programme for Government Framework Working Draft includes an outcome that states “We prosper through a strong, competitive, regionally balanced economy” although the only indicator to monitor regional balance is the rate of employment per council area.  Employment creation won’t necessarily improve productivity if the jobs are of poor quality or if people who are excluded can’t compete for the jobs being created.  In RCN’s view actions and policy to promote balanced regional development should benefit rural citizens and communities.  Cross border considerations are also relevant in NI and are even more important in light of Brexit.  The rural development programme has played an important role in developing cross border links and contains a co-operation strand to facilitate cross border working.  It is important that UKSPF and any rural fund it contains aligns with the rural development programme in the Republic of Ireland so that cross border co-operation is facilitated.

Ministerial statements on the UKSPF have committed to respecting the devolution settlements and engaging with the devolved administrations to ensure that the fund works for all places across the UK.  This is made more difficult here in the continued absence of a functioning Assembly.  Despite the problems and the bureaucracy of EU structural funds it’s important that we don’t throw the baby out with the bathwater.  We should recognise that LEADER has made some really important investment in rural communities that would not have happened without it.  Earlier versions of LEADER were particularly important in NI in involving rural stakeholders in designing and developing the rural development programme and it played an important role in building peace in NI and developing relationships between local politicians across the political spectrum before the ceasefires in 1994.

In my view the UKSPF must ring-fence a fund for rural development as is currently the case with EU structural funds.  Without a dedicated rural strand it’s unlikely that rural communities, with dispersed populations will be able to compete for