3. Mr Donnelly asked the Minister of Finance for an update on discussions with HM Treasury on the status of funding from the UK Shared Prosperity Fund beyond March 2025. (AQO 236/22-27)

Unfortunately, the British Government’s position on whether they will continue funding the Shared Prosperity Fund beyond March 2025 is not yet clear. I fully understand the anxiety of those in the voluntary and community sector who rely on this funding to support the vital work that they do. My officials have been pressing their counterparts in the Department for Levelling Up, Housing and Communities (DLUHC) and the Treasury for clarity on this. I intend to raise this matter at ministerial level in the time ahead. I will also be stressing that DLUHC needs to learn the lessons from the delayed implementation of the Shared Prosperity Fund here when it was first established.

I thank the Minister for her answer. There have been concerns about the way that the funding has been provided. For example, the money is released every three months in arrears, which creates instability for many organisations. What assurance can the Minister give that, beyond March 2025, the system in place will be more efficient and effective?

A number of lessons need to be learned from the roll-out of the Shared Prosperity Fund. The Member will be aware that we have also made the case in relation to the British Government delivering the fund centrally, rather than it coming through the Executive, and we are not able to align the funding that is delivered to our priorities in the Programme for Government and the things that the Executive want to achieve more broadly. All those lessons need to be learned, and we will make the case to the Treasury on how we move forward beyond March 2025.

Does the Minister agree that the Shared Prosperity Fund would be much more effective in addressing need if it were delivered directly by Departments here?

Yes is the short answer. The previous Finance Minister and the Executive argued that the replacement for EU funds should be delivered by local Departments and not from Whitehall. That would have enabled us to ensure that the funding was aligned with our priorities. Unfortunately, the British Government did not agree with that approach. However, my Department has worked closely with the Department for the Economy to secure funding from the Shared Prosperity Fund through commissions from DLUHC to DFE and its arm's-length bodies. Funding worth £17 million has been secured via that route. The commissioning approach has allowed funding to flow through established structures for the delivery of local interventions. Whilst not perfect, it is a welcome development and one that I hope can be built on for future funding.

The Women's Centre Derry and Derry Youth and Community Workshop have been victims of that flawed funding. Minister, what steps are you taking to ensure that we can undo the damage that has been done in our communities?

The Member will be aware that the Shared Prosperity Fund, as a replacement for EU funding, fell far short of what was delivered by EU funding through ESF and ERDF. The Shared Prosperity Fund in totality was £127 million over three years. The equivalent EU structural funds averaged £65 million per annum, so there is, obviously, a considerable shortfall. We also lost some funding that was repurposed as part of the financial package. It is important that we make the case for the EU structural funds to be fully restored relative to that amount and beyond it, because there is a seven-year commitment for EU funding, and we have only three years of the Shared Prosperity Fund. We need to continue to collectively make the case to the Treasury that the funding needs to be properly restored.

What percentage of the fund comes to Northern Ireland? Specifically, does that match the 3% of the population who reside here?

We made that case at the time. The Member will be aware that we did better in the drawdown of EU funds compared with, for example, the Barnett consequential that we get. I am not entirely sure what percentage we get, but I will ask officials to write to the Member about that.