The Government has approved councils’ plans to invest a new £2.6 billion development fund which replaces EU investment the UK no longer receives after Brexit.

The Department for Levelling Up, Housing and Communities (DLUHC) has been working with local leaders across the UK to allocate money from the new UK Shared Prosperity Fund (UKSPF) to areas most in need.

The UKSPF, which succeeds EU structural funding, is intended to be used by councils for initiatives to boost business and skills, regenerate high streets and improve local pride.

England, Scotland, Wales and Northern Ireland are receiving at least as much as they did from the EU under the replacement scheme, DLUHC said.

Councils in England, Scotland and Wales drew up their plans with local partners, while DLUHC has set out how the money will be spent in Northern Ireland, where it is managing the fund.

Levelling Up minister Dehenna Davison said: “We are taking full advantage of being outside the European Union and unlocking billions of pounds of investment to help level up communities and spread opportunity across the UK.

“The UK Shared Prosperity Fund will have tangible benefits for people up and down the country, from a young entrepreneur in need of a helping hand or those who want to gain the skills they need to secure a decent, well-paid job.

“The UK Government has worked closely with local leaders across England, Wales, Scotland and Northern Ireland, giving them a greater say in how this money is spent and ensuring funding is directed to where it is most needed.”

Funding for the UKSPF will be £2.6 billion between 2022 and 2025, with the figure reaching £1.5 billion per year by March 2025, to fulfil the Government’s commitment to match EU structural funds for each nation.

Local areas across England will see £1.58 billion, Scotland £212 million, Wales £585 million and Northern Ireland £127 million made available under the fund, according to DLUHC.

The Local Government Association (LGA), which represents councils, last week called for urgent clarity on when their investment plans would be approved after the Government repeatedly delayed the decision.

Responding to the Government’s approval of councils’ investment plans, an LGA spokesperson said: “This vital funding and approval of investment plans is important recognition of local leadership in driving regeneration and transforming local places, which the LGA has consistently called for.

“The Government must now work with councils and combined authorities to overcome any additional local challenges caused by the delay and make the introduction of the fund a success.

“This includes the need for assurances from government that there will be flexibility between years to spend the allocations.”