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Levelling Up Update

Volume 729: debated on Thursday 16 March 2023

Levelling up the United Kingdom is at the heart of our ambition as a Government. The Chancellor has announced a package of measures in his Budget which put power and money in the hands of our cities, towns, counties, and rural and coastal areas. Through this package, we continue to deliver the ambitions we set out in our levelling up White Paper, further supporting places across the country to reap the benefits of our economic success and strengthen their local economies and communities.

Devolution and local economic growth institutions in England

We have concluded our negotiations with the Mayors of Greater Manchester and the West Midlands on our “trailblazer” deeper devolution deals, subject to ratification. These deals mark a new chapter for English devolution and further progress in delivering our 2030 levelling up mission on local leadership. They transfer more control and influence over the levers of economic growth and levelling up to local, empowered, and more accountable leaders in England’s second city regions.

We have agreed a trailblazing package, including a single departmental-style settlement, unprecedented 10-year retention of business rates, devolution of post-19 skills funding and functions, and control of the affordable homes programme outside London for the first time ever. This will enable the mayors and local authority leaders to grow the economies of Greater Manchester and the West Midlands and drive levelling up, for the benefit of local residents and businesses.

These deals will act as a blueprint for deepening devolution elsewhere in England. We will begin talks with other MCAs on deeper devolution this year. The Government will set out more on plans for those talks soon.

We are continuing to work with places to implement the new devolution deals signed in 2022, and to invite new areas to come forward with proposals, as we progress towards our levelling up mission for every area of England that wants one to have a deal by 2030.

Through this work, we will empower places to take control of their own destinies. But with power must come accountability. We have published an English devolution accountability framework, which sets out clear and robust arrangements to ensure that decision-makers in areas with devolution deals are accountable to their residents and deliver value for money.

Local enterprise partnerships (LEPs)

The Government are committed to empowering local leadership at every opportunity. To this end, the Government intend for the functions of LEPs to be delivered by democratically elected local leaders, where appropriate in future. Therefore, the Government are minded to withdraw central Government support for LEPs from April 2024. The Department for Levelling Up, Housing and Communities and the Department for Business and Trade will now consult on these proposals, before confirming a decision. The Government will publish an updated policy position to confirm next steps by summer 2023.

Investment zones

The autumn statement set out the Government’s ambition to embed innovation throughout the economy and support the growth of priority sectors. Investment zones will harness existing local strengths and leverage places’ innovation potential to drive productivity and support levelling up across the UK.

Government have announced plans to enter discussions with places to host 12 high growth investment zones across the UK, each backed by £80 million over five years including generous tax incentives, bringing opportunity into areas which have traditionally underperformed economically. Investment zones will be clustered around research institutions such as universities and will be focused on driving growth the UK’s key sectors: digital and technology, creative industries, life sciences, advanced manufacturing and green industries.

Eight places in England have been shortlisted to host investment zones, with the intention to agree plans with local partners by the end of the year. The eight places are those covered by: the proposed East Midlands Mayoral Combined Authority; Greater Manchester Mayoral Combined Authority; Liverpool City Region Mayoral Combined Authority; the proposed North East Mayoral Combined Authority; South Yorkshire Mayoral Combined Authority; Tees Valley Mayoral Combined Authority; West Midlands Mayoral Combined Authority, and West Yorkshire Mayoral Combined Authority. An explanation of the methodology used to identify these places has been published on gov.uk.

The Government are also working closely with the devolved Administrations to establish how investment zones in Scotland, Wales and Northern Ireland will be delivered, which will account for the four final locations.

Levelling up partnerships (LUPs)

Levelling up partnerships will bring the collective power of Government to provide bespoke place-based regeneration in a further twenty of England’s areas most in need of levelling up over 2023-24 and 2024-25.

The following places will be invited to form levelling up partnerships over 2023-24 and 2024-25: City of Kingston upon Hull, Sandwell, Mansfield, Middlesbrough, Blackburn with Darwen, Hastings, Torbay, Tendring, Stoke-on-Trent, Boston, Redcar and Cleveland, Wakefield, Oldham, Rother, Torridge, Walsall, Doncaster, South Tyneside, Rochdale, and Bassetlaw. Our starting assumption is that we will work with the largest urban area within these local authorities, unless there is a strong rationale for choosing somewhere else.

These places have been selected based on the analysis in the levelling up White Paper which considered places in England against four key metrics: the percentage of adults with Level 3+ qualifications; gross value added (GVA) per hour worked; median gross weekly pay; and healthy life expectancy. Geographic spread has been considered to make sure regions across England benefit from the programme. The methodology used to identify the 20 places has been published on gov.uk. We also want to explore delivering this programme in Scotland, Wales and Northern Ireland, and will consult with the devolved Administrations.

Mayoral capital investment

To give mayors the resources they need to level up their areas, the Government have also provided a further £161 million for high-value capital regeneration projects in city regions across England, including business premises and food science facilities in Tees Valley, and unlocking investment in a research campus in the Liverpool city region. The funding will support delivery of 32 projects, and a list of these has been published.

Capital levelling up bids

Following the second round of the levelling up fund (LUF), in which the full £2.1 billion LUF was awarded, the Department for Levelling Up, Housing and Communities is using unallocated departmental budgets to fund, subject to subsidy checks, three further bids which narrowly missed out. These are in Sefton, Rossendale and Stockport local authorities, and are worth just under £58 million in total. Further detail on this is outlined in the accounting officer assessment for capital levelling up bids.

Capital regeneration projects

Since the conclusion of the levelling up fund round two, the Department for Levelling Up, Housing and Communities has identified further funding to support regeneration and town centre bids that were made into the fund. The Government are announcing grants for 16 projects that can start to spend and deliver quickly across England, worth a combined £211 million. These projects, subject to subsidy checks, are located in the following local authorities: Blackburn with Darwen, Blackpool, East Suffolk, Kirklees, London Borough of Waltham Forest, North East Lincolnshire, Northumberland, Redcar and Cleveland, Rotherham, Salford, Sandwell, Tameside, Telford and Wrekin, Tendring, Wigan and Wolverhampton. Further detail on the selection process is outlined in the accounting officer assessment for regeneration projects.

Community ownership fund

To empower local people to save community assets that matter most to them, the Government have announced 30 more projects across the UK that will benefit from the community ownership fund. These projects will receive a total of £7.73 million in funding, bringing the total number of assets to 98 and our overall investment to £23.9 million for neighbourhoods right across the United Kingdom. The list of successful projects has been published on gov.uk.

Other measures

To support local authorities to continue to deliver their existing development plans and bring forward new council housing supply, HM Treasury will be offering a new preferential public works loan board borrowing rate for council housing activity through the housing revenue account from June 2023.

To stimulate new housing supply and unlock development that would otherwise be stalled due to high levels of nutrient pollution, we will announce a call for evidence (CfE) from affected local authorities on nutrient neutrality credit scheme opportunities. Where high quality nutrient-credit schemes are presented, this Budget will provide investment to accelerate their delivery and unlock housing supply.

All relevant documents are available as links from www.gov.uk/government/news/levelling-up-at-heart-of-budget.

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