In June 2024, SPICe published a blog setting out the Scottish Government’s progress in spending structural funds allocated to Scotland during the 2014 to 2020 programming period. At that time, a significant amount of Scotland’s allocation remained to be claimed back from the European Commission.
A quick recap?
Whilst the programmes had concluded at the end of 2020, due to the European Commission’s N+3 rule, spending under the programmes was permitted until the end of 2023. The Scottish Government explained that whilst spending was no longer possible after this, the system for administering and paying out European structural funds was retrospective and as a result this meant the position in June 2024 was not a reflection of the final spend on the programmes.
What was the position in June 2024?
The Scottish Government did confirm that the total value of the Scottish 2014-2020 programmes had fallen from €941 million to €783.4 million (a drop of €157.6 million). Speaking in the Chamber on 26 June 2024, the Deputy First Minister Kate Forbes set out the reasons for the reduction in the value of the programmes:
“As I said in my statement on 13 June, and as is detailed in the Scottish Parliament information centre’s briefing, our original allocation of potential funding at the start of the programme was marginally reduced by the European Commission because some of our partners did not meet their annual spending targets. Let me be crystal clear about why that was.
Some partners had overestimated the costs that they would incur and the pace at which they would incur them, others were unable to meet the very strict criteria for projects and some partners struggled to prove eligibility for all their costs. For all those reasons, some potential funding was foregone—as a European Commission official pointed out as a statement of fact back in 2019. Changes to funding allocations have happened in other parts of the United Kingdom and, indeed, across Europe over the past 40 years of the programmes.
However, no money was handed back. It is simply the case that the ceiling of total funding allocations to Scotland was lowered. That did not impact on the delivery of any projects that were under way or on the ability of any partners to extend projects or to claim funding back from the Scottish Government.”
In addition to the value of the programme having reduced, the figures available last June showed that €503 million had been paid by the European Commission with a further €280.4 million still potentially remaining to be claimed from the Commission by the Scottish Government, based on the revised programme total of €783.4 million. Speaking about the €280.4 million still remaining to be claimed, on 13 June 2024, the Deputy First Minister told Parliament:
“Secondly, the amount that is currently committed to projects across the country that were led by our partners—mostly local authorities—is £545.7 million. That expenditure was all incurred prior to December 2023. Those valuable projects, some of which I will describe later, have concluded, and the final expenditure claims have been submitted to the Scottish Government. My officials are currently verifying those claims against the European Commission’s extremely stringent eligibility rules before making the final payments to our partners. Only once payments have been made can we claim the reimbursements from the European Commission, as we will do in July and October this year. That process is lengthy, and all payments are .retrospective.
Thirdly, and perhaps most importantly, the European Commission has recently extended the final date for submitting reimbursement claims, and we intend to make use of that to ensure that absolutely every pound or euro that can be claimed will be claimed.”
What is the position now?
The Scottish Government has provided updated figures to SPICe setting out the value of the programme which has been committed to projects in Scotland. The figures are shown in the image below.
For the European Regional Development Fund, of the total value of the programme of €415.7 million, the Scottish Government has committed €316.4 million which leaves a shortfall of €99.3 million. This equates to a total spend of 76.1% of the programme value.
For the European Social Fund, of the total value of the programme of €367.7 million, the Scottish Government has committed €350.8 million which leaves a shortfall of €16.9 million. This equates to a total spend of 95.4% of the programme value.
Speaking to Parliament last June, the Deputy First Minister provided assurances that “every pound or euro that can be claimed will be claimed”. The updated figures show that the final European Structural Fund programmes available to Scotland have seen a total commitment level of 85.1% of the total programme value.
In terms of spend, the Scottish Government has told SPICe that it anticipates a final “absorption rate” (the percentages of EU funding that have been paid by the European Commission to Member States’ Operational Programmes) of approximately 95% against the revised programme value of €783.4 million.
Uncommitted funds?
The Scottish Government has explained to SPICe that funding has been committed for all projects who applied and met the strict eligibility criteria and that the deadline for project spending expired at the end of 2023. With around €116 million of the programme’s value uncommitted, the Scottish Government is working with the European Commission to ensure the maximum remaining value of the programme is received by Scotland by utilising the European Commission’s STEP proposal.
Until the European Commission closure processes have been completed, it will not be possible to confirm Scotland’s final use of the 2014-2020 structural funds programme and the final absorption rate. Whilst it might not take all the available time, the European Commission has until December 2028 to conclude its closure processes.
The Deputy First Minister is expected to report the provisional position in relation to Scotland’s programmes in July 2025 once the Scottish Government’s final accounts and closure package has been submitted to the European Commission.
What has replaced European Structural Funds?
Following EU exit, Scotland no longer receives European Structural Funds. The UK Government’s replacement for the Funds is the Shared Prosperity Fund whilst a programme called Multiply was introduced to address some of the funding aims of the European Social Fund. According to the UK Government:
“The UK Shared Prosperity Fund (UKSPF) will support the UK government’s wider commitment to level up all parts of the UK. The UKSPF is a £2.6 billion Fund designed to succeed and improve upon EU structural funds. The UKSPF is not a direct replacement for EU structural funds. It improves on these funds by:
- focusing on UK priorities rather than policies dictated by the EU
- giving local areas a greater say in investments, by giving more direct accountability to elected local leaders.”
The UK Government has described the purpose of the Multiply programme as being to:
“help transform the lives of adults across the UK, by improving their functional numeracy skills through free personal tutoring, digital training, and flexible courses.”
These funds in Scotland are delivered through funding allocated to Scotland’s local authorities. UK Government figures show that for the period 2022-23 to 2024-24, local authorities in each of Scotland’s Regional Economic Partnerships received the following funding under the Shared Prosperity Fund and Multiply.
Regional Economic Partnership Totals | Core UKSPF | Multiply | Total |
Aberdeen City Region | £12,785,682 | £2,668,856 | £15,454,538 |
Ayrshire | £14,355,916 | £2,996,623 | £17,352,539 |
South of Scotland | £10,047,668 | £2,097,329 | £12,144,997 |
Edinburgh and South East Scotland | £33,211,244 | £6,932,444 | £40,143,688 |
Forth Valley | £10,429,076 | £2,176,943 | £12,606,019 |
Glasgow City Region | £61,116,874 | £12,757,406 | £73,874,280 |
Highlands and Islands | £19,967,429 | £4,167,958 | £24,135,387 |
Tay Cities Region | £13,446,294 | £2,806,751 | £16,253,045 |
The UK Government has also published figures for each Scottish local authority’s allocation within the Regional Economic Partnership model.
In total Scotland’s Regional Economic Partnerships were allocated £212 million for the 2022-23 to 2024-25 period (£175.4 million for the UKSPF and £36.6 million for Multiply). The allocated funding was not evenly spread over the period, with an allocation of £32 million in 2022-2023, £55 million in 2023-24 and £124 million in 2024-25.
However, unlike the administration of the European Structural Funds, the Scottish Government has little role in the administration of the UK Shared Prosperity Fund and Multiply with the money directly allocated by the UK Government to local authorities.
As discussed in a previous SPICe blog, the Scottish Government claimed that there was a difference in value between the funding Scotland previously received from the Structural Funds compared to that allocated by the UKSPF.
In March 2025, the UK Government announced the Shared Prosperity Fund allocations for the 2025-26 year. These allocations (to each Scottish local authority) provide for total funding for Scotland of just under £76 million equating to 8.42% of the total value of the UK fund. Compared with the allocated funding for 2024-25 of £124 million, the allocation for 2025-26 is a reduction of £48 million or 38.7%. However, it is larger than the amounts that were allocated in 2022-23 and 2023-24.
The UK Government also announced that the Multiply programme would not continue as a specific ring-fenced programme.
Iain McIver, SPICe Research