Rural businesses risk losing out on millions due to funding cuts

By Andrew Heskin, Partner and ARA specialist

According to the Country Land and Business Association (CLA), rural businesses may lose out on millions of pounds of funding under reforms to the UK Shared Prosperity Fund (UKSPF) in the Autumn Budget.

The CLA has said that the Government is removing support, which is meant to be aimed at levelling up the rural economy.

Under spending plans for the UKSPF, there is a shortfall of £315 million for rural businesses over seven years, says the CLA.

The loss of funding is the result of differences between the EU’s Structural and Investment Funds (ESIF) when compared to what will be received under the new UKSPF, which is meant to bolster rural productivity.

Under the new plans, the previous EU investment models that ringfenced funding for rural areas will be replaced by a scheme with no dedicated funding for rural companies.

As a result, the CLA said that many rural businesses will be unable to access the grant for the next three years.

The previous ESIF has played an important role in helping to fund around 40 per cent of the expenditure used to diversify farms through tourism, food processing and digital creativity.

The CLA said that the move goes against the levelling-up agenda, especially as rural areas are 18 per cent less productive than the national average and have earnings that are 10 per cent lower.

CLA President Mark Bridgeman said: “Plans under the UKSPF make a mockery of the Government’s promise to level up. This cut is a major backward step.

“When we speak of levelling up, we have a tendency to think of it purely in terms of the north/south divide, but too often there is a lack of opportunity in the countryside that drives people away.

“We want to create businesses, create jobs and prosperity – but we need Government support to do it.”

The changes to funding come at a time when many farms are already having to deal with the withdrawal of the Basic Payment Scheme, difficulties brought about by a decline in overseas trade and the lingering effects of the pandemic.

If you are concerned about the funding your farm receives, please speak to us.