The levelling up minister has admitted that a “rule” was implemented during the allocation of the Levelling Up Fund (LUF) that prevented councils successful in the first round from receiving money in the second round.
Dehenna Davison told the Levelling Up, Housing and Communities Committee (LUHCC) that due to the quantity and “incredibly high quality of bids” the government received, totalling around £8.8bn, ministers had to make “really tough” decisions on how the £2.1bn available was allocated.
She said: “There was no rule initially, certainly as part of the original bidding prospectus. But when it came down to making the ministerial decision on how the funding would be allocated, it was determined that in order to get the best geographical spread, which was a major consideration in the original perspective, that this probably would be the best route to go down.”
Davison’s comments follow a statement made by culture secretary Michelle Donelan in response to a media question about the LUF round two during a visit to Birmingham on 19 January.
She told ITV Central: “In the first round, Birmingham and the Midlands were very successful. In fact, there were three successful bids, and it was a rule that in the second round those that has been successful in the first couldn’t then be successful again.”
A great deal of time and money goes into pulling together such bids, as councils work closely with community partners, local members of parliament and other stakeholders.
Birmingham’s letter to Gove
Following Donelan’s comments, Ian Ward, leader of Birmingham City Council, wrote a letter to levelling up secretary Michael Gove calling for “urgent clarification” of the supposed “rule”. He also asked why local authorities successful in the first round of the LUF were “encouraged” to submit further bids in round two.
Ward highlighted that councils put large amounts of money and resources into these “fruitless bids”, which are estimated at £27m. “As you are aware, a great deal of time and money goes into pulling together such bids, as councils work closely with community partners, local members of parliament and other stakeholders.”
Birmingham City Council submitted five bids in the second round of the LUF worth £82m, which included projects such as the regeneration of Erdington High Street and Northfield. In the first round of the LUF, the authority was successful in bidding for three projects.
In the letter, Ward questioned why, if the “rule” did apply, other local authorities, such as the London Borough of Ealing, had received funding in both rounds.
However, Jessica Blakely, director of levelling up major programmes at the Department for Levelling Up, Housing and Communities (DLUHC), rejected this claim at the LUHCC meeting and stated that no individual “local authority” had been successful in both rounds.
In response to the “rule” on allocation of the LUF round two, a DLUHC spokesperson said: “Our decision-making criteria, published last year, made clear that ministers could take into account other investment in local areas, including grants from the first round of the fund, to encourage a spread of funding across more areas. Only when all bids had been received, and their quality known, could decisions be taken to achieve this.”
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