According to the latest official figures, revealed today by the Labour Party, 90% of the allocated funding for ‘Levelling Up’ has yet to be spent. The latest figures from government show that £224 million had been spent up to January 2023, with that figure rising to £392 million in February 2023. The total value of the fund is £4.8 billion with two rounds of funding awarded, £1.7 billion in October 2021 and £2.1 billion in January 2023.
The Department for Housing, Levelling up and Communities has made it clear that councils receive funding in line with awards of spending. This money allocated is due to be spent over “at least three financial years”.
Levelling Up funds allocated but not spent
Coined by former Prime Minister Boris Johnson, the Levelling Up concept aims to reduce economic inequality between different regions by improving transport, education and broadband. The process ensures that various local authorities can apply for the fund from the UK government to pay for infrastructure projects.
11 areas were awarded the money in the second round in January. Notable examples include £27 million being awarded for a ferry in the Shetland islands and a new train line between Cardiff Bay and Cardiff Central Station. Thus far, the fund has allocated funds for £3.8 billion to 216 projects in total over two rounds.
Despite the slower release of funds, Levelling Up Secretary Michael Gove defended the Government’s stance on the project stating that Chancellor Jeremy Hunt ensured “millions of pounds would be spent in his budget”.
Gove rejected the analysis that the underspend represented a failure of the Levelling Up policy. He stated that the money from the Levelling Up funds first spending round, allocated in October 2021, was due to be spent by March next year. Money from the second round is due to be spent by March 2025. Prime Minister Rishi Sunak has also shown approval of Levelling Up arguing that “the most deprived areas would benefit” from funding.
The process of funding allocation is the main source of criticism to the scheme. Shadow Secretary of State for Levelling Up Lisa Nandy criticised the government’s approach stating that they are able to “get their act together when it comes to the 1%, but when it comes to investments in local transport decent housing even on delivering on a single one of the levelling up missions” they have been unsuccessful.
Further criticism came from Liberal Democrat spokesperson, Helen Morgan who said the Government has “overseen a systematic failure” in being able to provide necessary funding to dozens of communities that require it. Mayor of the West Midlands, Andy Street, referred to the process as a “broken begging bowl culture”. [BH1] London Mayor, Sadiq Khan has also criticised the Government’s flagship policy by claiming that “levelling up adds little value to London communities”.
The Labour party has stated that it would change the process of Levelling Up, which sees areas competing against each other, the North West of England winning most of the bids in both rounds. Changes, proposed by the Labour party would occur after the current projects that have been approved are completed.
The policy of Levelling Up is universally popular and as stated in Michael Gove’s original whitepaper, tackling regional inequality has been a goal of many Governments before this one. What is now coming into question is whether this model of Levelling Up is succeeding.
The current process sees councils bidding against each other for limited funds which are then awarded by the Treasury. The scheme has been dogged by complaints of unfairness due to the opaque process for awarding funds.
While today’s news will shake confidence in the administration of Levelling Up funds the long term challenge for the Government is to explain why the Treasury is best placed to decide which bids win, whether funds are allocated fairly and why it is more efficient to go through a bidding process rather than simply allocating the funds to local authorities on the basis of population.
Photo Credit: Jeremy Segrott