On 7 August 2016, the new Prime Minister, Theresa May, made amendments to a planned public consultation regarding the implementation of the Shale Wealth Fund announced in last year’s Autumn Statement.
The Shale Wealth Fund was originally described as being a way for oil and gas producers to spread the benefits of revenue gained by future onshore production with community trusts and local councils. It is planned to be a scheme whereby up to 10% of all tax revenue arising from shale gas production is to be used to benefit those communities which host shale gas production. It is thought that the Shale Wealth Fund could provide up to £1 billion in funding over 25 years with a maximum pay-out to each eligible community or region of £10 million over that same period. The Shale Wealth Fund would be in addition to the existing industry commitment to contribute £100,000 at the exploration phase in relation to each hydraulically fractured well site and 1% of total revenue from the production from those sites to local communities.
The new plans announced on Sunday would, if implemented, allow local residents to benefit directly from the Shale Wealth Fund rather than only through community organisations and local government. This broadening of the terms of the consultation is expected to increase interest in it and elicit responses from a wider spectrum of interested parties, including individuals and charities, businesses, local authorities and community groups.
Ahead of the announcement the Prime Minister said, “This announcement is…about making sure people personally benefit from economic decisions that are taken – not just councils – and putting them back in control over their lives.” It further demonstrates the British government’s efforts to make the prospect of a UK shale industry attractive, not only to industry, but to local communities by allowing them to benefit directly.
Responses to the consultation are invited to be provided by 25 October 2016.