A Squandered Opportunity: Rural England Prosperity Fund in the East of England

Anglia Rural Consultants contend that the Rural England Prosperity Fund for capital items of rural development for businesses and communities, provided by Defra and administered by rural local authorities, has been ill-conceived and frequently misapplied. It is unlikely to achieve its intended objectives or provide value for money.

Background

The Rural England Prosperity Fund (REPF) provided £110m to rural mayoral, unitary and local authorities (LAs) as grant assistance towards capital development projects that supported UK Shared Prosperity Fund (UKSPF) development priorities for local businesses and/or community and place.

These funds were provided by Defra as supplementary to the UKSPF, administered by the Department for Levelling Up, Housing and Communities (DLUHC). Indicative allocations were announced in June 2022, with authorities required to submit their plans for approval to Defra by November in order for grant schemes to go live in April 2023, with the programme lasting until March 2025, by which date the money must be paid out to successful applicants. The fund was seen as a successor to the successful previous rural development programmes that include the most recent round of LEADER. In Defra’s words, the Rural Fund is to provide small scale capital funding to:

  • Support new and existing rural businesses to develop new products and facilities that will be of wider benefit to the local economy. This includes farm businesses looking to diversify income streams.
  • Support new and improved community infrastructure, providing essential community services and assets for local people and businesses to benefit the local economy.

It was implied that LAs would split their funding about 50/50 between business and community projects; this in reality has not been followed through.

REPF in Practice

Anglia Rural Consultants observations and experience of REPF in practice in the east of England, largely limited to the funding element for local businesses, has been:

Design and management

  • Defra appeared not to make use of LEADER experience and knowledge in designing and commissioning REPF.
  • Limited guidance was provided to participating LAs.
  • No understanding or acknowledgement of LAs inexperience of operating rural development capital grant schemes.

Proposals from LAs

LAs submitted proposals to Defra for review in November 2022. Amounts offered were confirmed in April 2023, with no changes.

  • There was little consultation between LAs and external stakeholders that is helpful to shape the new programmes.
  • Most simply used examples provided by Defra as guidance.
  • Some proposed to use the funds for existing pet LA projects or for revenue funding of additional staff.
  • Funding rates and limits varied widely, from 20% to 100% and from £5,000 limit to £150,000 for business support measures for profit making applications, creating post-code lotteries for applicants and the opposite of a level playing field.
  • There is inconsistency over what items are eligible for support, e.g. for solar panels and batteries. LAs seem generally unaware of the ineligibility of standard agricultural equipment and its probable irrelevance to farm diversification. Defra has failed to clarify such issues.
  • Defra’s review failed to identify and alert those LAs whose proposals were inappropriate or unacceptable in a timely fashion, thereby incurring substantial delays in scheme launches in a number of LA areas.

Timescales

  • No LA schemes were launched in April 2023. Funding was not confirmed by Defra until the middle of the month and many LAs have been reluctant to launch their schemes until funding was actually deposited with them – despite the fact that individual projects have to be designed, applied for, appraised, grant-awarded and then initiated and delivered before the LA is obliged to pay out an award. Even for an off-the-shelf purchase, this process will take several months; for a project requiring planning permission, this can extend to more than a year.
  • Several LAs had not launched schemes by November 2023 and do not intend to until April 2024, one year into a two-year programme.

New Schemes’ Promotion

  • Many LAs have chosen to brand REPF funds with their own identities and little reference to REPF causing confusion for applicants searching for the funds.
  • Launch and promotion has largely been by web site; some web sites are difficult and unclear to navigate.
  • The degree of guidance given to applicants varies widely. Defra have failed to identify or promote best practice.
  • Press releases to local papers have been effective in creating initial awareness.

Application processes

  • Processes vary widely and include complete applications on-line; two-stage applications by email, with sifting by the LA from an initial application; brief expression of interest on-line followed by support from LA staff to complete a full application.
  • Unnecessary hurdles have been put in place, one LA has insisted that applicants can choose from one of four external delivery partners and must undergo 12 hours training before they can apply for a grant – up to a maximum of £5,000.
  • Value for money has proved difficult. Despite Defra and the RPA themselves using a system of the applicant providing three comparable quotes for all capital items costing over £5,000, national government advice to LAs has been that they should use the same systems as they use for their own capital purchases. Not all LAs have followed that advice, appreciating that it is not appropriate for small businesses; at least two LAs requiring up to 5 quotes or, at higher levels of cost, e-portal tendering.
  • Local plans, strategies, and engagement efforts lack consistency across LAs, with many merely linking to Defra’s output table, lacking local context. Poor diligence in appraising small grant schemes raises concerns about programme effectiveness and value for money.

Conclusions

  • Rural is different – that’s why we have Defra, and CLA, NFU, county rural strategies. We are entitled to expect Defra to understand why and how rural is different and to provide a skilled, understanding and experienced lead on rural matters. Where REPF is concerned, it has failed to do this.
  • Defra failed to provide an effective design for REPF and to oversee its subsequent delivery by others. It failed to exploit and develop the experience it should have gained from the design and operation of the LEADER schemes, which had a proven mix of central policy and objectives allied with well-grounded, evidenced and reviewed local strategies and delivery.
  • REPF has failed to demonstrate any measure of levelling-up because in practice it has been inconsistent in its approach to grant-funding and in the manner and amount of its awards to rural businesses.
  • The REPF timeframe has been very short. In one sense, this is a happy mistake, in that, as a failed scheme, it does not last long. However, any successor scheme should recognise that a rational approach to assisting rural development takes time to design, establish and develop full effectiveness. There are successful models that should be followed; the current Farming in Protected Landscapes (FiPL) scheme, though severely restricted in area, does involve both commercial and community rural interest in its grant decision-making.
  • The failure of the REPF will mean that government objectives will not have been met. The current state jeopardizes programme objectives, risks misusing public funds, and hinders future rural economic development.