PRESS RELEASE : EU replacement funding 60% shortfall [December 2022]

The press release issued by the Scottish Government on 30 December 2022.

Scotland is missing out on more than £300 million in European support under the UK Government’s replacement funding programme.

As the first payments are made to local authorities through the UK Shared Prosperity Fund, Employment Minister Richard Lochhead said Scotland is suffering from a 60% shortfall in financial help.

The UK Government promised its UK Shared Prosperity Fund would replace in full all EU funding lost to Scotland after Brexit. But it has only allocated £212 million to Scotland over a three-year period, when EU funding would have been worth around £549 million over three years – a shortfall of £337 million.

The new fund is distributed exclusively through local authorities, excluding national, community and Third Sector groups, risking the loss of the services which these organisations provided. The UK Government has also taken sole responsibility for use of the funds; previously the Scottish Government allocated EU funding to ensure the needs of Scotland’s people and communities were properly met.

Mr Lochhead said:

“EU structural funds have made a real difference across the country, helping more people into work and delivering new skills through better training and support. This welcome contribution from the EU has been eradicated by Brexit and the UK Government’s replacement for EU funding has fallen far short in both the quality and quantity of what is required.

“The UK Government has ignored the devolution settlement and failed to recognise the authority of the Scottish Government in devolved areas. This replacement for EU funding ought to be fully devolved, allowing funding to flow to regions and communities in line with shared Scottish policies, designed to best serve Scottish needs.

“Shared Prosperity has also left local authorities racing against the clock to spend their funding by March, or face losing it and see their plans reduced to tatters due to the UK Government’s delay in only now agreeing the allocations.

“The approach taken thus far by the UK Government is against the principles of partnership working and risks diluting Scottish Government efforts to transform the economy and support families and sustainable public services during this cost of living crisis.”