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Levelling Up: Funding Allocation

Volume 827: debated on Monday 23 January 2023


Asked by

To ask His Majesty’s Government what progress they have made with the allocation of Levelling Up funding.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and I declare my interest as a member of Cumbria County Council.

My Lords, levelling up is one of the driving missions of this Government. We are delighted to announce the outcome of the second round of the levelling up fund, which has seen £2.1 billion award to 111 bids that we know will stimulate growth and benefit communities across the United Kingdom. This builds on the success of the first round, which saw £1.7 billion award to 105 successful projects across the UK, to drive regeneration and growth in areas that have been overlooked and unappreciated for too long,

I thank the Minister for her reply. I think many of us on this side of the House were delighted that the Government were making levelling up a priority to deal with the growing regional inequalities in our country. However, the Prime Minister made no reference to levelling up as one of his priorities in his new year speech. The announcement last week was slipped out without any Statement in the House of Commons, as though it was slipped out in shame. The grants awarded appear to have no coherence or consistency and owe much to political jobbery. Do the Government still believe in levelling up? If they do, what on earth do they mean by it?

My Lords, we absolutely still agree with the whole project of levelling up. I just need to say that, of all the bids, the north-west—this will please the noble Lord opposite—had the highest number of successful projects and was second in funding per capita; Wales was top and the north-east was third. I suggest that that is putting the money where it is required.

My Lords, I quite understand why the Government wanted to kick-start the levelling-up policy with these centrally allocated grants, but looking ahead, and given the commitment in the levelling-up White Paper to usher in a revolution in local democracy, should not these funds in future be added to the block grant given to the increasingly large local authorities set up under the Bill and then local people could decide what their priorities are, with local councillors accountable to their local electorate?

My Lords, competitive funding can be a very effective tool for protecting value for taxpayers’ money. Competitions such as the levelling-up fund can also support fair and transparent awards of funds and drive innovation, but I understand my noble friend’s concerns and the Government have committed, within the levelling-up White Paper, to reducing the complexities of local government funding.

The Minister has just said that competitive funding is an effective way of accessing this funding pot. There were 525 bids in this latest round; only 111 were successful; that means 80% were not successful. Each bid is estimated to cost £30,000 to make; that is £12 million of hard-pressed council funding basically wasted on bids. Can the Minister not find a more effective way, such as devolving the money to local authorities, so that this money is not wasted when it is desperately needed?

My Lords, this is capital funding. There were 111 successful bids this time; before, there were 105 successful bids; and there will be a third round. If we added all this money and gave it to local authorities, I do not think there would be enough for the large infrastructure projects—projects that people are very happy to be delivering and projects that local authorities have put forward because they are important to their people. I think this is the way to do it.

My Lords, is the problem here not so much a social one as a constitutional one? Is it not, in fact, an abuse of the power of prerogative that Governments should hand out money in this party-political way, a way that is not transparent?

My Lords, we give this money out in a very transparent way: it can all be seen on GOV.UK, and 45% of all funding from the first two rounds was given to local authorities run by the Opposition parties. I would have thought that was quite fair.

My Lords, I welcome the new devolution deal that has been done for the north-east and look forward to the appointment of an elected mayor for the region. If this devolution deal goes ahead, which I trust it will, can His Majesty’s Government clarify what proportion of the estimated £4.2 billion of investment into the region will be truly new money that the local new mayor can allocate out?

I thank the right reverend Prelate for that question and I will have to give him a written answer: I do not have that information on the north-east devolution deal.

What are the implications for Northern Ireland? Is it receiving its fair and proper share of the funding? Will it be spent in Belfast and throughout the Province for the benefit of all sections of the community?

My Lords, a very fair amount of money went out to all the devolved authorities across the country and it will be up to the local authorities that put in a bid as to how that money is spent, according to the projects that they bid for.

My Lords, local authorities have recently complained about the Government’s proliferation of competitive funding pots creating a system beset by fragmentation, inefficiency and complexity. Does the Minister really think that the best way to do levelling up is to force struggling councils to constantly compete just to get the investment they desperately need?

My Lords, we do not know of a better method for capital funding. There is not just the levelling-up fund but a suite of funding going out to local authorities for capital projects, including the towns funds, the community ownership funds, the freeports and the UK shared prosperity fund, which is given out in terms of percentages.

My Lords, many people see child poverty as the measure of where levelling-up funding should be targeted. Why then in the north-east did no authority north of the Tees get anything? What do authorities such as County Durham have to do to be recognised by the Government?

My Lords, the north-east got the third-highest level of funding per head of capital across the country. It is up to local authorities to bid for their priorities; I am sorry if they did not get them, but if they did not bid for them then I hope they will do so in the third round.

My Lords, the very fact that so many local authorities tried to bid for levelling-up funding shows that there is an appetite in the country for it and for these projects. Will His Majesty’s Government ensure that the successful schemes are shovel-ready and that we will see them delivered in a timely manner?

My noble friend is absolutely right. That is one of the issues that the Government will have looked at. We wanted projects that were ready to go so that services and infrastructure would be delivered for people as soon as possible.

I will follow on from the number of questions about the methodology for levelling up. This funding is allocated according to criteria set by the Government and is judged by government Ministers in Westminster. Is this what they call devolution?

My Lords, the devolution part of it is that local authorities have the money to put forward their specific issues for which they need funding. It is not necessarily Ministers; they are tested against criteria that have been set up, and those that come highest up against the criteria will get the funding.