Tory national service policy would leave UK’s poorest areas worse off, IFS warns

Rishi Sunak’s election pledge to introduce mandatory national service would leave the UK’s poorest regions millions of pounds worse off, a thinktank has warned.

The prime minister announced last weekend that if he was re-elected, every 18-year-old would have to spend time in a competitive, full-time military commission or spend one weekend a month volunteering in “civil resilience”.

Related: Tories’ national service pledge was sprung on candidates, says minister

However, the Institute for Fiscal Studies (IFS) has found that the Conservatives’ proposal to pay for the scheme by scrapping the UK shared prosperity fund from 2028-29 would severely downgrade efforts to level up the country.

Its analysis found that if the money that would have been distributed via the fund were instead redirected according to the number of 18-year-olds in each area who take part in national service, then Wales could lose £275m a year, Cornwall £72m, and the North East and Tees Valley mayoral areas a combined £46m.

David Phillips, an associate director at the IFS, said the Conservatives’ plan to redirect the fund’s resources would represent a major shift in how spending was allocated across the country.

“Rather than being targeted at poorer areas and aimed at levelling up, the funding would be spread across the country based on where 18-year-olds are undertaking their military or community service,” he said.

“The scheme may therefore create opportunities for young people across the UK but would mean hundreds of millions less in funding for community and economic development in Wales, Cornwall and the north and Midlands of England.”

Related: Rishi Sunak’s national service pledge is ‘bonkers’, says ex-military chief

Officials claimed the policy would give young people “real-world skills, while contributing to their country and community”. Labour said the plan was a £2.5bn unfunded commitment that was only necessary because the Conservative party had hollowed out the armed forces.

The shared prosperity fund is a £1.5bn a year programme that was set up after Brexit to replace EU regional economic development programmes. As such, funding allocation is particularly high in economically disadvantaged areas such as the south Wales valleys and Cornwall.

Labour has not outlined plans for the shared prosperity fund but a 2022 report commissioned by Gordon Brown recommended merging the funding with other streams and devolving powers to mayors.

The IFS joins a long line of critics of Sunak’s national service pledge. While Tory party officials claimed the scheme would give young people “real world skills, while contributing to their country and community”, the scheme was rubbished by military chiefs and the former Conservative defence secretary Michael Portillo.

Adm Alan West, a former chief of the naval staff, said it was “bonkers” and would deplete the defence budget. Labour said the plan was a £2.5bn unfunded commitment that was only necessary because the Conservative party had hollowed out the armed forces.

The Conservative party declined to comment.