UK Community Renewal Fund

What is it?

The UK Community Renewal Fund is a £220m investment pilot scheme that will be distributed in the 2021-2022 financial year across local areas in the UK to revitalise business activity and community programmes.

The end goal will be to create opportunities to trial new approaches and innovative ideas at a local level. A larger follow-on fund worth £1.5bn per year called the UK Shared Prosperity Fund will be launched in 2022.

How is it going to be distributed?

The UK Government has identified that each local area has challenges that require unique solutions in order to level up each region of the UK. Every pilot scheme launched from the UK Community Renewal Fund will enable local authorities to explore how best to tackle local challenges.

Local fund administrators will be empowered to focus on areas that fall short within their town or city, such as building skills, supporting local businesses, providing employment support or developing communities into places where people want to live and work in.

This means that existing local businesses will be able to access funds that will help them grow and new enterprises will be encouraged to establish themselves within highly supportive local ecosystems.

How is funding transitioning from the EU to the UK?

After leaving the EU via Brexit, the UK is set to lose billions every year worth of funding from EU Structural Funds. There is currently a remaining EU funding amount allocated to local areas that is expected to run out completely by 2023. A transition is required for the UK Government to completely replace any funding that was previously administered by the EU, so that local communities and businesses do not miss out.

As mentioned above, the UK Community Renewal Fund sets to invest an initial £220m of this replacement funding as a part of a pilot scheme in 2021-2022, before seeing a bigger more permanent replacement fund being rolled out in 2022 as part of the UK Shared Prosperity Fund, worth on average around £1.5bn per year. In principle, this will leave all areas of the UK no worse off from the effects of Brexit after EU funding is taken away. The UK Government promises that funding will be delivered quicker than when it was administered by the EU and deprived areas will be better targeted by investment needs from local and domestic insights, which would previously have been lost when funding was broadly applied across 28 different EU countries.

How will the fund work?

The UK Government has identified 4 different core focuses for funding allocated and it is expected that 90% of all funding from the UK Community Renewal Fund will be revenue funding

1. Investment in Skills

Innovative projects for this area will include:

• Work-based training schemes:
  • Determining specific local needs from employers for on-the-job training to support local growth

• Retraining, upskilling or reskilling members of the workforce
  • Helping local businesses identify skills gaps and get financial support for new skills training

• Promoting the advancement of digital skills and inclusion
  • Remove the barriers of digitally excluded individuals to train them up with digital skills to stop a lack of IT literacy being a barrier to employment

2. Investment for local business

Innovative projects for this area will include:

• Supporting entrepreneurs and helping businesses create new job opportunities
  • Helping businesses access investor readiness schemes and private sector experts to encourage growth

• Encouraging businesses to develop innovation potential
  • Encouraging knowledge transfer activity and collaboration between businesses and higher education institutions or development of incubation services or innovation facilities

• Supporting decarbonisation measures
  • Encouraging local businesses to invest in new technology and energy efficiency measures to reduce greenhouse gas emissions

3. Investment in communities and place

Innovative projects for this area will include

• Feasibility studies for new-zero and local energy projects
  • Assessing the viability of local green projects, including electric vehicle charging and coastal investment projects

• Exploring culture-led regeneration and community development
  • Using culture to attract people to city centres and rural and coastal towns, including research for projects to general footfall to support private-sector business

• Improving green spaces and preserving important local assets
  • Enhance natural assets, such as green space to improve quality of life and attract talent and also boost tourism

• Promoting rural connectivity
  • Developing opportunities for digital functionality and physical connectivity to give rural businesses access to online opportunities

4. Supporting people into employment

Innovative projects for this area will include

• Support people to engage with local services to get support for employment
  • Bring together multi-agency teams to help support individuals into getting back into work

• Identify and address barriers to employment in local labour markets
  • Help provide support to individuals to remove any barriers of employment they have to help get them back into work

• Raising aspirations to help individuals find sustainable employment
  • Providing support for vulnerable members of society, such as those dependent on drugs and alcohol and help provide them with skills to get back into work

• Supporting people to gain basic skills
  • Providing access to key skills for employment, such as English, Maths, digital and English for foreign workers

• Testing initiatives to help people move towards work
  • Carrying out innovative approaches to determine the best way to get unemployed back into the labour market

How will the funds be delivered locally? (England, Scotland, Wales)

Each local area across England, Scotland and Wales will take part in a competitive process to apply for funds. Lead authority bids will be managed dependent on the make-up of local government authority.

Lead authority types include:

• Mayoral Combined Authorities (England only)
• Greater London Authority
• County Councils
• Unitary Authorities

The UK Government has also identified the top 100 places across the country, which are most in need for investment funding and projects from these areas will take priority over funding for other areas.

How will the funds be delivered in Northern Ireland?

Northern Ireland is set to receive its own dedicated pot of funding from the UK Community Renewal Fund worth £11m. Funding is set to be distributed via a national competition here rather than via local councils. All communities of Northern Ireland have identified as being of equal need for investment rather than any specific priority regions being defined.

When can businesses expect to start seeing pilot schemes launched?

The UK Government has been assessing bids and determining funding for successful allocations throughout July and an announcement is expected at some point shortly after this regarding what funding has been awarded to which regions.

The first tranches of funding will then be released to lead authorities in England, Wales and Scotland and businesses will then be able to apply directly to any schemes following instructions from their local authorities. Funding will also be released directly to Northern Ireland project providers for businesses to make applications to.

The fund will then run until 31 March 2022.

What is coming next: The UK Shared Prosperity Fund

As of April 2022, once the UK Community Renewal fund has completed, the Government will then start rolling out the first tranches of the UK Shared Prosperity Fund, which will see a total of £1.5bn worth of funding allocated across regions of the UK.

Once the Government has been able to carry out monitoring and evaluation on the UK Community Renewal Fund pilot schemes and receive feedback from Lead Authorities, they will be in a better position to determine how best to roll-out the larger, more permanent UK Shared Prosperity Fund and aim to level up all areas of the UK and support businesses in less economically attractive areas.