Guidance

Rural England Prosperity Fund: prospectus updates for 2025 to 2026

Updated 4 April 2025

Applies to England

1. Introduction

This prospectus update provides details of the key changes to the Rural England Prosperity Fund (REPF) for 2025 to 2026.

This information updates parts of the REPF Prospectus, which was produced for 2023 to 2025 delivery.

You should use this prospectus update along with the original REPF Prospectus to guide delivery of the Rural Fund from April 2025. Except where specifically mentioned in this document, the guidance provided in the Prospectus remains unchanged.

This update also accounts for changes made to the UK Shared Prosperity Fund (UKSPF) prospectus.

This section replaces section 1 and 2.1 of the REPF Prospectus.

1.1 What is the Rural Fund?

Rural areas often face specific challenges including:

• lower productivity rates
• poorer connectivity
• poorer access to key services

1.2 The REPF supports the aims of the government’s Missions and Farming and Countryside Programme. It funds capital projects for small businesses and community infrastructure in rural areas. This will help to improve productivity and strengthen the rural economy and rural communities.

The UK government is committed to delivering 5 missions to secure long-term prosperity for the country. The Rural Fund will support the government’s mission in rural areas to:

• kickstart economic growth
• break down barriers to opportunity
• build an NHS fit for the future

The UKSPF has mapped interventions into mission-led themes across priority areas. The REPF will support 2 of the 3 UKSPF investment priorities:

• communities and place
• supporting local business

REPF investment priorities and the government’s missions

Image description: This picture sets out 3 of the government missions the Rural Fund will support:

• Mission 1: Kickstart economic growth
• Mission 4: Break down barriers to opportunity
• Mission 5: Build an NHS fit for the future

It shows 2 of the 3 UKSPF investment priorities that REPF will support (Supporting local business and Communities and place), their underlying themes and sub-themes, and how these align to the original REPF interventions.

Supporting local business

The Support for business theme sits under the Supporting local business priority. This is the only theme under this investment priority.

Support for business supports:

• Mission 1: Kickstart the economy
• Mission 4: Break down barriers to opportunity

Its scope includes advice and support to business, this includes the following interventions:

• growing the local social economy and supporting innovation
• small scale investment in micro and small enterprises in rural areas

Communities and place

There are 2 themes under the priority of Communities and place. These are Healthy, safe and inclusive communities, and Thriving places.

Thriving places supports:

• Mission 1: Kickstart the economy
• Mission 4: Break down barriers to opportunity

Its scope includes development of the visitor economy. This includes the following interventions:

• the development and promotion of the visitor economy
• existing cultural, historic and heritage institutions that make up the local heritage offer
• local arts, cultural, heritage and creative activities

Healthy, safe and inclusive communities supports:

• Mission 1: Kickstart the economy
• Mission 4: Break down barriers to opportunity
• Mission 5: Build and NHS fit for the future

Its scope includes improving health and wellbeing, bringing communities together and tackling homelessness. This includes the following interventions:

• local arts, cultural, heritage and creative activities
• investment in capacity building and infrastructure support for local civil society and community groups
• rural circular economy projects
• impactful volunteering and social action projects to develop social and human capital
• investment and support for digital infrastructure for local community facilities
• creation of and improvements to local rural green spaces
• active travel enhancements in the local area

1.3 The Rural Fund is integrated into the UKSPF which supports productivity and prosperity in places that need it most. For eligible local authorities, the Rural Fund is a rural top-up to UKSPF allocations. It supports activities that specifically address the particular challenges rural areas face. It is complementary to funding used to support rural areas under the UKSPF.

The Rural Fund sits alongside existing Department for Environment, Food and Rural Affairs (Defra) schemes, including the:

• Farming in Protected Landscapes programme
• Farming Investment Fund
• Platinum Jubilee Village Hall Improvement Grant Fund

Read Section 6.1 Who can the Fund support? for the main objectives of these schemes.

Eligible local authorities qualify for an allocation based on factors developed in line with the scheme objectives. This includes the size of their rural populations. Not all authorities with rural areas are eligible. Read Section 3.1 How the allocations were determined.

Funding is available from April 2025 to March 2026.

The Rural Fund provides 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

This funding should not replace funding plans for rural areas under the UKSPF. It is a top-up to help address the extra needs and challenges facing rural areas. You must use funding on capital projects. This means you must spend grants on lasting assets such as a building or equipment.

2. What to use the funding for

This section is an addition to section 2.2 of the REPF prospectus.

REPF must not be used to fund farming equipment or infrastructure or to diversify within agriculture. Applicants looking for funding for this type of activity must use existing Defra grant schemes.

REPF can however provide funding (capital grants) for small scale investment in micro and small enterprises in rural areas where this is intended for farm business diversification projects outside of agriculture (for example, creating rural leisure and tourism facilities) as set out in the interventions table.

3. Funding places will receive

Section 3 has been updated to reflect new dates, fund quantum, allocations, and forms of local government.

A total of £33 million is available for the financial year 2025 to 2026. Read Rural England Prosperity Fund allocations to check your allocation. 

Allocations have been determined at local authority level. The indicative allocations show totals for Mayoral Combined Authorities (MCAs) and Non-Mayoral Combined Authorities (NMCAs). In MCA and NMCA areas, you should use allocations to fund projects in rural areas. You do not need to spend them in each local authority where funding is allocated, although we encourage this. 

3.1 How the allocations were determined 

Allocations have been updated to reflect changes to lead local authorities since 2023 where devolution deals for areas have been agreed, more details are available in the methodology. We have not changed the methodology to how allocations are determined. All areas that received allocations in 2023 will receive an allocation for 2025.

4. How to deliver the fund

This section replaces section 4.1 of the REPF prospectus

4.1 Overview

You’ll receive funding as part of your UKSPF allocation. You’ll continue to agree and contract projects locally in line with the approved additional information you provided.

We expect you to achieve fund investment and outputs in line with each place’s spend profile.

The Rural Fund can only be used to meet costs relating to activity that takes place between the 1 April 2025 and 31 March 2026 (inclusive). You can use other sources of funding, including your own contributions, after this date to complete schemes.

Planning for delivery in 2025 to 2026

In line with the delegated delivery model, lead local authorities will not need to submit a revised addendum. You should update us on your plans for 2025 to 2026 through routine UKSPF reporting. This also applies to places with a new or revised devolution deal that is operational by 31 March 2025.

6. The Fund’s parameters

Sections 6.2 and 6.5 have been updated.

6.2 When can the investment start? 

The Rural Fund can support investments starting from 1 April 2025.

6.5 Complying with UK law 

As per the updated UKSPF prospectus, lead local authorities are now required to comply with the Subsidy Control Act 2022 and the Procurement Act 2023.

7. How we will pay each place or project

This section replaces section 7 of the REPF prospectus.

The Rural Fund operates England-wide and will continue to use financial assistance powers in the UK Internal Market Act 2020 for 2025 to 2026 to deliver funding to rural places in England.

Local authorities should defer to the updated UKSPF technical note and additional guidance, their payment schedule, updated memorandum of understanding, and grant determination letter for the 2025 to 2026 financial year.

As before, we reserve the right to withhold or delay payment, and will ask you to return any underspends at the end of the financial year . 

8. How we will measure performance

This section replaces section 8 of the REPF prospectus.

Local authorities should refer to the updated UKSPF technical note and additional guidance for information on reporting, monitoring and performance management.

8.1 Rural Fund indicators 

See the new list of objectives, outputs and outcomes that are linked to REPF interventions for the fund indicators. Use these as a guide when deciding your Rural Fund interventions for 2025 to 2026. 

9. Next steps

This section replaces section 9 of the REPF prospectus.

Lead local authorities should plan for 2025 to 2026 delivery with local rural stakeholders. We will expect lead local authorities to inform MHCLG of their forecasts through routine reporting. Local authorities should defer to the updated UKSPF technical note and additional guidance.

For more information, contact: RuralEnglandProsperityFund@defra.gov.uk