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Regional Inequality: Local Authority Funding

Volume 689: debated on Monday 22 February 2021

What steps he is taking to help ensure that local authority funding is used to tackle regional inequality. [R] (912375)

What steps he is taking with Cabinet colleagues to ensure that local authority funding is used to tackle regional inequality. (912385)

This month, the local government finance settlement passed through this House, delivering a 4.6% rise in core spending power to councils across the country. For England, we are committed to putting funding where there is relative need, irrespective of the location, which is why councils in the most deprived areas of the country receive 16% more in grant funding than the least deprived areas.

Here in South Yorkshire, we used European Union and local growth funds to support our economy, attract investment and create good jobs. Now that they have come to an end, can the Minister guarantee that their replacements—the shared prosperity and levelling-up funds—will give local leaders the flexibility and capacity to invest that money to rebuild our communities?

I thank the hon. Gentleman for his question and for the constructive way in which he continues to work with the Government. The levelling-up fund is worth £4 billion. It will be invested in local infrastructure that will have a real and visible impact on our communities, whether that be a new bypass, an upgraded railway station, museums, more libraries, or better high streets and town centres. The fund will be allocated competitively and we will be publishing a prospectus for it soon. We are also providing £220 million of additional UK funding next year to support communities to pilot programmes and new approaches in preparation for the UK shared prosperity fund. We will publish the prospectus for this funding soon. I assure him that this funding will be at the heart of the levelling-up agenda, benefiting communities across the country. As always, I will be happy to discuss the detail with him when those prospectuses are published.

Powys County Council has historically received one of the lowest local government allocations across Wales from the Welsh Government. As a consequence, the local authority is considering closing four rural schools in Brecon and Radnorshire, deepening rural inequality even further. Will the Minister confirm that the Welsh Government have the funding to prevent that and that they could even use the extra funding given to them by the UK Government as a result of the coronavirus pandemic, which they have yet to spend?

I thank my hon. Friend for her question. She is right to say that we have given Wales £5.2 billion of guaranteed up-front funding this year, and we have now confirmed an additional £650 million for the Welsh Government to support public services affected by covid-19. Of course, local government is a devolved responsibility, and it is for the Welsh Government to decide how to use the substantial funds the UK Government are providing them with. I encourage them to meet my hon. Friend to discuss how best to protect the vital public services that she has rightly highlighted on behalf of her community.

Few details of the shared prosperity fund have been published. Will the Minister guarantee that the fund will be used to tackle regional inequality, as intended, that no region will lose out and that the Government will not force councils to compete against one another, wasting time and resources when they could be getting on with providing services that local people depend on?

I can certainly assure the hon. Lady that the UK shared prosperity fund will help level up and create opportunity right across our country in the places that need it the most, be they ex-industrial areas, deprived towns or rural communities, and for people who face labour market barriers. It is going to operate UK-wide, using the new financial assistance powers in the United Kingdom Internal Market Act 2020. We will ramp up funding so that total domestic UK-wide funding will at least match receipts, reaching about £1.5 billion a year.