Benefits of the Levelling Up Fund ‘questionable’

AN ASSESSMENT of the UK Government’s Levelling Up Fund says it is “questionable” whether it will deliver greater prosperity for local communities.

Earlier this week it was announced that six Welsh local authorities – Carmarthenshire, Ceredigion, Pembrokeshire, Powys, Rhondda Cynon Taf and Wrexham – will between them get funding for 10 local projects from the scheme.

Pembrokeshire council, for example, has been awarded £17.7m in “levelling up” funds towards Haverfordwest’s regeneration and £4.1m for the second phase of a community and care hub project at South Quay, in addition to heritage works.

But a report from the Industrial Communities Alliance is unenthusiastic.

It says: “As part of the recent Spending Review the UK Government published a list of the first 105 successful bids, worth £1.7bn, into its new £4.8bn Levelling Up Fund.

“No doubt all the successful projects – and many that failed in this bidding round – have substantial merits. But is the government’s choice of winners likely to contribute significantly to Levelling Up? Have the weakest local economies been targeted? Only up to a point. Of the 94 successful bids in England, Scotland and Wales, only 42 are in the poorest third of sub-regions in terms of GVA per head. Fourteen of the successful bids are in sub-regions where GVA per head is above the UK average, including six in London.

“Have the North [of England], Scotland and Wales been shortchanged? Possibly. With such a high proportion of the country’s less prosperous areas, it might have been expected that the north of England, Scotland and Wales would fare particularly well, but only 43 of the successful bids – 41% of the total – are in the North, Scotland and Wales.”

Considering whether the outcomes represent a political stitch-up, the report says: “Probably not.

“Ministers were criticised over the allocation of the Towns Fund, which appeared to target marginal constituencies just ahead of the 2019 General Election. Regarding the Levelling Up Fund, 45 of the successful bids are in local authorities that are Labour-led, compared to 24 in Conservative-led authorities.

“Some 39 of the successful bids are in constituencies held by Labour, 45 are Conservative-held and 8 are SNP-held.

“The government has issued an explanatory note on the assessment and decision making process. According to the note, ministerial input came late in the selection process and concerned giving preference to high quality bids, spread across Britain and across regeneration, transport and culture.”

Considering whether the successful projects will help deliver Levelling Up, the report says: “This looks questionable. Levelling Up in a lasting sense almost certainly means raising the performance and prosperity of weaker local economies.

“Generating more good jobs would raise local incomes, and raise spending across a big swathe of the local economy. Investment that doesn’t improve the economy can have other benefits but it rather misses the point.”

A UK Government spokesman responded: “Three-quarters of the funding allocated via the Levelling Up Fund went to areas most in need of investment. A further £3.1bn of the fund remains to be allocated and we will work with unsuccessful applicants to improve their bids for the next round. The selection process for the Levelling Up Fund is transparent, robust and fair.

“For Wales, the first round of funding exceeds the share it would have received under the Barnett formula were the Levelling Up Fund England-only. This will help to ensure opportunity is spread more equally across the whole UK by boosting living standards.”