The allocation of the Levelling Up Fund round two, which awarded 111 areas a share of £2.1bn, has been criticised by local government leaders for being based on costly competitive bids rather than “evidence” or “deprivation”.
On 18 January, the Department for Levelling Up, Housing and Communities (DLUHC) announced the successful bids of the Levelling Up Fund round two, with £672m allocated to develop better transport links, £821m awarded to regeneration projects and £594m given to restore local heritage.
Kevin Bentley, chairman of the Local Government Association’s people and places board, welcomed the announcement of the levelling up funding but criticised the way it has been allocated to councils.
He said: “Levelling up should be locally led by evidence of where crucial investment needs to go to, not based on costly competitive bids between areas.
“This is not a sustainable approach to economic development or public service delivery, as it falls short of the challenge set out by the levelling up white paper and the ambitions of local leaders for their residents and places.”
Bentley’s sentiment was echoed by Stephen Houghton, chair of the Special Interest Group of Municipal Authorities (SIGOMA), who highlighted that the competitive process “is not the best way to fund local government and local investments” as more than 400 bids were unsuccessful.
It is important that ‘levelling up’ funding is properly targeted to areas that need it most. However, these allocations appear to bear little relation to deprivation.
Funding ‘not based on deprivation’
The North West of England was awarded the most amount of the Levelling Up Fund round two at £354m. However, the government has received criticism that the levelling up funding is concentrated disproportionately on the South East, with the area receiving £210m, whilst the North East received significantly less at £109m.
Houghton said: “It is important that ‘levelling up’ funding is properly targeted to areas that need it most. However, these allocations appear to bear little relation to deprivation.
“SIGOMA’s share of the funding for England is lower than our share of population, despite our areas including many of the most deprived communities in the country.”
Successful bids in the Levelling Up Fund round two include £50m for the Eden Project North situated in Morecambe, £50m for Cardiff Crossrail and £40m for Blackpool Council and Wyre Council to build a new artificial intelligence campus.
Dan Bates, director at consultancy LGi, told Room151: “For successful applicants, levelling up support will provide a significant boost to economic development in their area.
“However, many authorities, including those that serve areas of higher deprivation, will be left disappointed that their bids have not been successful. LGi analysis shows that more deprived areas have suffered from a deep imbalance in spending power changes over the last decade, although that has only redressed partially in the last couple of years.”
Levelling up secretary Michael Gove has since defended the allocation. He said on BBC Radio 4’s Today programme: “If you look in terms of the amount of money allocated per person, then it is the case that it’s the North West, the North East, Wales that do best overall. London and the South East together constitute a quarter of the country’s population.”
The awarded bids follow the allocation of £1.7bn to 105 projects from the Levelling Up Fund round one in 2021. The government confirmed last year that round two would match round one, but increased the funding by £400m after receiving “so many high-quality applications”.
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