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Written on 27 Nov 2020 by Owen Garling

What does the Chancellor's announcement on the Levelling Up Fund tell us about how it will be delivered?

‘Levelling up’ has been a key government mantra since the election nearly 12 months ago. What does the Chancellor’s announcement about a £4 billion ‘Levelling Up Fund’ as part of the Comprehensive Spending Review tell us about how ‘levelling up’ will be delivered? asks Owen Garling.

Included within the Comprehensive Spending Review (25 November 2020) was the announcement of the creation of a £4 billion Levelling Up Fund for England.

“This will invest in local infrastructure that has a visible impact on people and their communities and will support economic recovery. It will be open to all local areas in England and prioritise bids to drive growth and regeneration in places in need, those facing particular challenges, and areas that have received less government investment in recent years.” 

Spending Review 2020

Further details are due to be published by the government in the New Year about how ‘levelling up’ will be supported across the UK. In the absence of that detail, what does this announcement tell us about ‘levelling up’?

First, this new fund – the Fund for England – will continue to have its purse-strings held by central government. The Treasury, the Department for Transport, and the Ministry of Housing Communities and Local Government (MHCLG), all have a stake in the operation of the fund. How the three departments will coordinate to manage the fund and juggle their various strategic priorities remains to be seen.

The Comprehensive Spending Review talks of “moving away from a fragmented landscape with multiple funding streams.” And yet the Fund for England joins an already crowded landscape of existing funding streams, such as the Towns Fund and the Future High Streets Fund. Whilst the announcement of these funds is welcome and will generate considerable interest, there is a question of how much capacity there is in places for applying for yet more standalone funds, with all the management overheads that this entails.

Like the Towns Fund and the Future High Streets Fund, the mechanism for distributing the funding is one of organisation’s submitting bids for approval by central government. In this we see the continuing hierarchical view of the relationship between central and regional and local government, and the perceived need to maintain control.

In the Conservative manifesto, the Prime Minister spoke of how “we as Conservatives believe you can and must trust people and communities to make the decisions that are right for them.” Yet this trust seems to be missing from the Fund for England. It also leads one to question central government’s trust in those existing organisations – such as Combined Authorities and Local Enterprise Partnerships – through which this funding could have been disbursed.

By requiring organisations to bid for funding for individual projects there is also a risk that the opportunity to take a more strategic approach is missed. As the review of the Green Book, announced as part of the Comprehensive Spending Review sets out: “it will no longer be acceptable for proposals to be ‘place blind.’ Business cases should be developed to align with relevant local strategies and major interventions in the area.” The Fund for England should represent an opportunity to put this approach into practice. The existence of a national spatial strategy – or even regional spatial strategies – would strengthen this approach further by providing a clear framework against which projects could be developed.

The Comprehensive Spending Review sets out that the Fund for England will “invest in a broad range of high value local projects up to £20 million, or more by exception, including bypasses and other local road schemes, bus lanes, railway station upgrades, regenerating eyesores, upgrading town centres and community infrastructure, and local arts and culture.” Whilst this is indeed a broad range of projects and it is welcome to see the inclusion of community infrastructure and local arts and culture, one wonders whether there will be a sufficient balance between the ‘hard’ infrastructure of roads and bus lanes, and the investment in ‘social infrastructure’ called for in Danny Kruger’s report on Levelling Up Our Communities. Again, this will require an adept use of the revised Green Book to make sure that different investment options can be appropriately compared and contrasted.

Finally, it will be interesting to see if the lessons from the recent National Audit Office report into the Town Deals selection process have been learnt. The report found that whilst officials provided recommendations for the prioritisation of different towns bids, ministers did not always follow these. In the words of the chair of the MHCLG Select Committee, Meg Hillier: “The system gave ‘every appearance of having been politically motivated.’” Concerns about the possible politicisation of funding have already led to a degree of confusion over whether projects require the support or the sign-off of their local MP.

So, what have we learnt about the government’s approach to ‘levelling up’ from their announcement? Rather than devolving responsibility for the funding to a level of government that is perhaps closer to the real issues faced by places, control continues to be maintained by the centre. At the same time, a competitive bidding process is proposed that potentially pits projects against each other, rather than a longer-term more strategic view. Finally, the Fund will “prioritise bids to drive growth and regeneration in places in need, those facing particular challenges, and areas that have received less government investment in recent years.” Given the experiences of the Towns Fund, it will be a test of the government’s accountability and transparency to see how the Fund for England will be allocated.

We wait for further details in the New Year.

  • About the author

    Owen Garling, Knowledge Transfer Facilitator

    Owen Garling works at the Bennett Institute in the role of Knowledge Transfer Facilitator. He is currently on secondment from his role as a Transformation Manager at Cambridgeshire County Council, where his work has focussed on understanding how the public sector can work differently by ...   Learn more