Plans for a Shale Wealth Fund were announced in last year’s autumn statement with proceeds expected to be shared between community trusts and local authorities. However, the Shale Wealth Fund Consultation launched on 8 August 2016 includes the possibility of funds being paid directly to local residents in host areas.
It is proposed that communities could receive up to 10% of tax revenues derived from shale exploration in their area with the new fund potentially delivering up to £10 million per eligible community.
The consultation emphasises that the purpose of the Shale Wealth Fund is to ensure that “the benefits of shale developments are shared by communities and regions in which the resource is developed” and “that the benefits of shale will go to local people first, and individuals and communities who host developments will be directly involved in the decision making about how the tax revenues from shale are spent.”
A number of options are proposed as to how local people could benefit from the Shale Wealth Fund, such as shaping and influencing how it is delivered and what it is spent on, to receiving payments directly.
The consultation closes on 25 October 2016 and seeks to explore the following key issues:
- what the government’s priorities should be for the Shale Wealth Fund;
- the allocation of funding from the Shale Wealth Fund to different stakeholder groups;
- the extent to which the industry community benefits scheme and the Shale Wealth Fund should be aligned; and
- potential delivery models for the Shale Wealth Fund – to ensure that households and communities benefit, and to decide how funds are spent, and how any process should be administered.
The Government anticipates that the two priorities of the Shale Wealth Fund should be providing locally focused benefits and enhancing the regional economy, especially in the north of England where the shale industry is most likely to develop.
It is envisaged that the Shale Wealth Fund will be additional to any community benefits provided by the industry. It is anticipated that the Shale Wealth Fund will deliver benefits later in the process given that it will comprise tax revenues which will only be accrued after full production commences. Benefits provided by the industry will begin once the first exploration wells are drilled to test the flow of gas.
 This is in accordance with the community engagement charter produced by the shale industry body UK Onshore Oil and Gas.