Council leaders have expressed concern that rising inflation will reduce the spending power of levelling up funding, which means authorities may no longer be able to afford particular projects.
Matt O’Neill, Barnsley Council’s executive director for growth and sustainability, said that the time delay between councils submitting levelling up bids and the government deciding successful bids meant that the cost of the intended project was much more than originally predicted.
Speaking at a Levelling Up, Housing and Communities Committee (LUHCC) evidence session, he said: “We would have some constraints and worries about inflation if we were successful in any of the bids, in terms of how that would be delivered in the context of the application that was initially put in considering the delay in time of when we’re actually hoping to commence and construct.
“So, in all of that uncertainty ,that does add additional pressure with construction prices and material.”
This sentiment was echoed by Kevin Bentley, Essex County Council’s leader and chairman of the Local Government Association’s People and Places Board, who highlighted that local government cannot afford to “top up” the money lost to inflation.
“We’ve seen it through Housing Infrastructure Fund bids, we’ve seen it through Levelling Up Fund bids, that by the time we put in the bid and the money is awarded, with inflation, suddenly, you can’t afford the actual bid itself.
“And we at local government, I think I can speak for all of us when I say we’re not awash with money, so we don’t have money floating around, we can’t certainly top up this grant.”
Both O’Neill and Bentley expressed to the LUHCC that councils need to try calculating the money that will be lost to inflation in bids, but ultimately the government needs to speed up its decision making on successful levelling up funding allocation.
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