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Levelling-up and Regeneration Bill

Volume 827: debated on Wednesday 22 February 2023

Committee (2nd Day) (Continued)

Amendment 43A

Moved by

43A: After Clause 3, insert the following new Clause—

“Reporting on missions: robotics and automationWithin 90 days of a Minister of the Crown laying a statement of levelling-up missions for the first time which contains reference to the use of automation, a Minister of the Crown must publish a report which considers whether introducing a taskforce would help to increase effective use of robotics and automation, and reduce disparities between geographical areas in this regard.”

My Lords, it is a pleasure to speak to this amendment. In doing so, I declare my technology interests as set out in the register.

We have a productivity problem in this country. There are a number of causes—immigration policy, skills policy—but an area that gets precious little attention is the number of robots in the workforce, not just in manufacturing but across the whole United Kingdom workforce. The measure, taken by the IFR, is robots per 10,000 of the employed population. The UK has 111; we are in 15th position, at the bottom of the G7, yet robots could make such a difference to productivity, to levelling up and to the shape, size and scale of the UK economy. That is what my Amendment 43A is all about: opening up the whole question of how we increase the number of robots in the workforce—and they should be considered members of the workforce. We need to consider them, and be cool with “cobots”.

In the medium term, they are certainly productivity creators and job makers. Yes, in certain sectors and industries, there may be serious transition that should be taken seriously, considered and dealt with as we move more robots into the workforce, but ultimately they are productivity creators and job makers. Amendment 43A merely asks the Government to have a task force for this purpose, to improve the levelling up of the economy across the UK for the benefit of all of us. I beg to move.

My Lords, I start by thanking the noble Lord, Lord Holmes, for tabling this amendment. It is really interesting, and I was very interested in what he had to say about the possibilities this opens up. It is important to encourage the Government to consider how automation and robots can help, not hamper, the levelling-up agenda, and how they can be part of making a difference. Automation and robotics can bring enormous possibilities to improve Britain’s productivity and boost the national economy. This is clearly a really important part of what underpins the White Paper and its objectives, but it will be realised only if the Government can actually harness that potential.

There have been ad hoc announcements relating to robotics. For example, Defra has promised new funding for agriculture and horticulture automation and robotics. However, what we do not have is an overarching strategy to ensure that the benefits of this kind of technological development can be felt equally across the board, and there are so many different areas that noble Lords referred to where this can be used.

Similarly, it seems that there is no concerted effort to negate the harmful effects of automation on the future of work. Workers are rightly concerned when they hear about automation coming into the businesses and factories in which they work. That is partly because, for too long, many workers have been at the wrong end of automation and have suffered as a result of their labour being casualised. It is really important that this be addressed, so I would be interested to hear if the Minister has an update on steps following the 2022 Future of Work review. If the Minister commented on how that could take forward robotics and automation in the workforce, that would be very helpful.

Having said that, our ambition for automation and robotics should extend far beyond just negating any negative impacts. The Government should be considering how they can make the UK a destination of choice for investment in these emerging technologies. It was interesting to hear the noble Lord, Lord Holmes, say that we are in a really low position in this regard. I was quite surprised by that, because I have always thought of us as an inventive country and society. There is ground to be made up here, and it seems that, unfortunately, a lack of skills is presenting a common barrier. As announced, the Labour Party believes that a “Skills England” body should be set up to address the current skills shortages. There should be a national effort to upskill Britain, which would allow us to meet the future challenges of automation and other emerging trends in our economy. Will the Government consider whether replacing the Unit for Future Skills would allow automation and robotics to better support the levelling-up agenda?

Finally, any prosperity that results from emerging technologies in the UK needs to be distributed a long way beyond just the south-east of England, which, unfortunately, is where it is mainly focused at the moment. As part of the levelling-up agenda, it is important that these emerging technologies, skills training and where businesses are deciding to invest are properly monitored, and that local authorities become part of that. The noble Baroness spoke earlier about the importance of working with local authorities on other parts of the levelling-up agenda. Engaging with local authorities on future opportunities to invest in automation and robotics will be really important if we are to spread the benefit and make the most of automation and robotics for the future of our economy.

My Lords, Amendment 43A, in the name of my noble friend Lord Holmes of Richmond, would oblige the Government to publish a report that considers establishing a taskforce to help increase effective use of robotics and automation and consider the impact on regional disparities. I am grateful to my noble friend for bringing us to this important set of issues, which have major implications for the levelling-up agenda.

It is perfectly true that the UK lags behind the global average when it comes to adopting robotics technology, and this is holding back UK manufacturing productivity. There are, of course, shining exceptions to that general statement. The nuclear fusion cluster around Culham in Oxfordshire has been described as the UK’s Silicon Valley for nuclear fusion robotics and will play a key role in maintaining fusion power plants. The UK Atomic Energy Authority’s RACE programme is at the forefront of developing robotic technology. Nevertheless, we are ranked the lowest in the G7 for robot density and 24th globally.

What are the barriers to adoption? The noble Baroness, Lady Hayman, put her finger on one of the main ones, which is technical skills. We lack those technical skills. However, apart from skills, there are three others that I am afraid have held us back: leadership and management skills, access to finance, and investment appetite.

I am in full agreement with my noble friend in wanting more manufacturers to adopt technology that will improve productivity and stimulate growth, such as robotics and automation, and we have programmes that support them to do this. This includes the Made Smarter programme, which has committed almost £200 million in funding to manufacturers—large, small and medium enterprises—to develop new technology solutions and adopt existing tech, including robotics and autonomous systems.

The £24 million Made Smarter adoption programme is available to manufacturing small and medium enterprises in the north-west, the north-east, Yorkshire and the Humber, and the east Midlands and West Midlands regions. The programme provides expert advice, grant funding and leadership training to SMEs to help them adopt robotics, automation and autonomous systems, as well as other industrial digital technologies that can improve productivity and growth.

We are also considering what further to do in this field. We convene a Robotics Growth Partnership, chaired by Professor David Lane and Paul Clarke, which works with robotics and autonomous systems sector leaders across academia and industry to put the UK at the cutting edge of the smart robotics revolution ambition, turbocharging—as we would like to call it—economic productivity and unlocking benefits across society. Last year the Robotics Growth Partnership published a vision for cyber physical infrastructure, and the Government will shortly publish their consultation response on that subject.

The levelling-up mission on R&D, designed to increase the amount of R&D funding outside the greater south-east, and accompanying initiatives such as innovation accelerators, will help to provide additional support to areas with existing expertise in robotics such as the Glasgow City region. The Derry/Londonderry and Strabane region city deal will also see investment in the region’s Centre for Industrial Digitalisation, Robotics and Automation. The Levelling Up Advisory Council has also committed to exploring how to improve the uptake of productivity-enhancing technologies by businesses as part of its work considering regional adoption and diffusion.

I hope that my noble friend will find what I have said a source of some good cheer. The Government are well aware of how important this agenda is, and while at the moment a task force is not thought necessary, should the Government find it desirable to establish a task force in future, it would not be necessary to legislate to establish one. I therefore hope that my noble friend will feel sufficiently reassured to withdraw his amendment.

My Lords, I thank in particular the noble Baroness, Lady Hayman, for her comments; I agree entirely with her comments on skills. If we are to gain all the advantages of the new technologies—the fourth industrial revolution—it will be this combination of skills, the right immigration policy and robotics, and all the new technologies that are at our fingertips right now. I thank in particular my noble friend the Minister for a very full, thorough, detailed and positive answer. I am certainly aware of the initiatives that he has set out and it is excellent to have them all now on the record.

We need, however, a target—something to aim at —because we should be on the podium when it comes to this. Currently, we are not even in the B final. So we may want to return to this in some form on Report and certainly see whether something can be done to tie this very clearly to the overall levelling-up mission that I know that we are all so fully committed to. For now, I beg leave to withdraw the amendment.

Amendment 43A withdrawn.

Clause 4: Changes to mission progress methodology and metrics or target dates

Amendments 44 and 45 not moved.

Clause 4 agreed.

Clause 5: Reviews of statements of levelling-up missions

Amendments 46 to 49 not moved.

Clause 5 agreed.

Amendment 50

Moved by

50: After Clause 5, insert the following new Clause—

“Levelling Up FundIf an allocation is made from the Levelling Up Fund, a Minister of the Crown must publish a statement explaining how the allocation supports the levelling-up missions.”Member’s explanatory statement

This means that the Government must explain how allocations from the levelling up fund support the levelling up missions.

My Lords, I add my thanks to the noble Lord, Lord Holmes, for an interesting debate on robotics. It was an interesting answer from the noble Earl as well.

I am speaking to Amendment 50 in my name, the amendment tabled in the name of my noble friend Lady Hayman and in support of Amendment 57, submitted by the noble Baroness, Lady Valentine. I am grateful for her engagement with me and with my noble friend Lady Hayman on this part of the Bill.

The levelling-up fund, well intentioned as I am sure it was, has generated more light than heat so far. The unfortunate Hunger Games-style bidding process pitted areas that all have legitimate needs against one another, wasted millions in the application process and has seen the bids eaten away by inflation. That has broken too much of the promise with which the fund set out. In fact, just today, SIGOMA—the Special Interest Group of Municipal Authorities—published its analysis, saying that there is no strong correlation between deprivation and allocation from either round 1 or 2 of the levelling-up fund. It seems that even the Treasury is concerned about the fact that there appears to be little to link the allocations with identified regional inequalities, or any strategy to show the contribution that the fund is making to the overall strategic aims of the missions.

As we heard earlier today, regional inequalities are going in the wrong direction and therefore increasing. I referred earlier to those issues. Transport is one example. There are many examples of bus services being lost up and down the country and an appalling situation relating to train cancellations, which are now at a record high.

The noble Baroness, Lady Pinnock, in an earlier group, set out the shocking fact that Leeds has spent a third of a million on the bidding process, which achieved absolutely no return whatever. We do not yet know what the total figure is for the UK but, in these desperate times for local government funding, it is a travesty that authorities are having to put that much money in without any idea as to whether they will get a return—something that you would never tolerate in business, I suspect.

In the amendments debated on day 1 of Committee, a strong case was made for including the missions in the Bill—we heard more about that today—to ensure that there is clarity of purpose and so that we can be sure that funding allocated for levelling up clearly demonstrates which mission or missions it is aimed at. Of course, we are very pleased for those areas that received levelling-up funding. I was with the leader of Broxbourne Council yesterday and he was delighted to have been successful in his bid. But, given that local government has lost £15 billion in funding since 2015, a funding round of £2.8 billion is crumbs from the table when there are communities that are desperate, really desperate, for investment.

It is of great concern that in the round 2 bids, there was rock-bottom allocation for Yorkshire and the Humber, and nothing for Birmingham, Nottingham, Stoke, or the Stonehouse community in Plymouth that is in the bottom 0.2% for economic activity. We really must do better than explaining the criteria for bidding after the submission of the bids has closed, which happened with round 2. It has also become apparent that the impact of inflation on round 1 bids has meant that some of them have had to be re-evaluated, some of them have not even had a spade in the ground so far, and there is no clear path for meeting the added costs. I am sure that the Minister, with her extensive experience in local government, knows that expecting local authorities to meet inflation costs from their hard-pressed budgets, on future bidding rounds or even on the existing ones, is unrealistic.

I am sure that what local government would really like to see is not these constant bidding rounds—it is not just the levelling-up fund, there are others as well—but a real long-term plan for a sustainable and fair funding system meaning that local areas can plan for their own futures and focus on delivering levelling up in their area, rather than competing for successive bidding rounds. I served on the fair funding task force for over five years. It does not seem to have got anywhere very far. It is about time we recognised that real localism means real funding for real local authorities to deliver what their areas need.

The amendments are designed to ensure that we have clarity around the link between the missions and the funding, and to make provision for review after a year to ensure that they are delivering against anticipated outcomes. I am sure that even the Treasury would agree with that. I beg to move.

My Lords, my Amendment 57 is about the distribution of levelling-up funding. The premise of it is, first, that levelling-up challenges are by their nature long-term and difficult and, secondly, that any attempt to address them must be locally sensitive and not hampered by different government departments approaching the issue from different perspectives.

My contention is that short-term funding which fails on the above counts is counterproductive, causing local people to be pulled in different directions, chasing money which does not properly address their local needs. A report by the Business in the Community’s place task force, Partnerships in Place, on intervention in forgotten places, says:

“Levelling up funding needs to be flexible, long-term, localised and aligned with the levelling up missions to maximise”

the chances of “transformative change”. It praises, for instance, the Welsh Government’s Communities First programme, which operated for 16 years from 2001 to 2017 and helped 52 of the most deprived places in Wales. The report also makes the point that capital funding should have significant revenue streams aligned with it to ensure that the relevant agencies have the capacity to deliver well.

I will give some examples of good and bad practice related to funds for levelling up, to illustrate my argument. In some ways, literacy improvement is one of the more straightforward missions. It is measurable, and after 18 years of appropriate education, most children could expect to be literate. Let me give some colour to how the funding works in Blackpool and Bradford. Both were opportunity areas and under that banner were addressing literacy. These are sensible, multi-year interventions on social mobility and education, grounded in understanding of local needs. However, the programme finished in September 2022. The 12 areas across the country became “priority education investment areas”, with less money.

Blackpool’s aim is to provide targeted literacy intervention, but it still awaits its current year allocation. What the Government think is happening with those children during this academic year, I cannot imagine. If you delve further into the funding, there are some larger pots available. There is something called a safety valve bid of about £6 million for school buildings for children with special educational needs, and another safety valve bid of £3.8 million, reflecting the support needed for the huge proportion of high-needs young people in the community, but right now, Blackpool does not know whether it is getting any of this money.

In Bradford, again, the opportunity area had been focusing on literacy. At Business in the Community, we now have a newly created group to focus specifically on literacy in Keighley. This involves working with the Bradford Literature Festival, the Asian Women’s and Children’s Centre, the local mosques, local business and the Keighley Schools Together group, among others. We hope to devise a long-term approach to make a measurable difference, which can be a legacy of Bradford being City of Culture 2025. The government opportunity area funding, however, has ceased.

The recent community renewal fund epitomised several aspects of bad practice. Locality said that the short-term timescales—where bids had to be submitted by mid-June and money spent by the following March—coupled with the competitive bidding process, have seriously hampered the CRF’s ability to make an impact. In Norwich, a colleague of mine ran workshops funded by the CRF in the most deprived part of the city, based on local needs such as financial skills. However, given that they had only three months to deliver, there was not time to build the necessary trust and rapport with some of the individual members of the community who most needed the training, let alone provide ongoing support. My sense of CRF was that the policy was broadly fine, but that when it came to implementation, there were unrealistic and un-joined-up requests for outcomes from multiple government departments, which, combined with short timescales, made it dysfunctional.

However, let me congratulate the Government on a few levelling-up interventions which have worked well. First, the town deal programme, providing substantial capital funding to forgotten places, seems to me to be heading in the right direction. It satisfies a few criteria: it supports local ambitions led by a local partnership; the partnership is business-led, with a cross-section of stakeholders providing a degree of market reality and financial and business nous; it is multiyear; and it addresses issues across government departments. What I notice is that where these town deals are governed by a genuine partnership with a credible, non-vested business lead, they are largely effective. Unfortunately, with the desire to get the money out the door, it is possible that the majority do not quite pass this test. The town deals are playing into a tough economic environment. These weaker town deals will struggle and even the strong ones are likely to cost more, but the Government need to stick with them.

Secondly, the department is now undertaking some deep dives into a few places to see whether a strategic alignment between a place and national government can help to shift the dial. This approach is working well in Blackpool and, in particular, is sorting out some of the cross-Whitehall barriers, which include moving the courts off a £300 million regeneration site and focusing different departments on a Civil Service hub. There are further cross-departmental challenges to come. For instance, the DWP pays housing benefit to people living in illegally squalid housing, or there is the money granted to supported housing providers, who anecdotally dissuade youngsters from taking employment opportunities because they then lose the funding.

I finish by saying that I completely understand the difficulty for the Government in addressing all these levelling-up issues. My plea is that the Government do not make them worse with bad approaches and poor implementation from their ivory tower, nor, for that matter, unsubstantiated ministerial or politically motivated preference versus localised distribution decisions. One lesson is that a stop/start approach to funding will never help.

My Lords, I rise primarily to speak to Amendment 57, tabled by the noble Baroness, Lady Valentine, which was very eloquently supported in detail by what she just had to say. I also want to speak in support of the other amendments in this group. They are all on essentially the same matter, which is: how have the Government transferred, and how do they plan to transfer, resources from the centre to local government, so that they can deliver the levelling-up agenda that both the Government and local government want to see delivered in those areas?

I was motivated to add my name in support of Amendment 57 because of the fiasco of the two rounds of wasteful bidding that have taken place so far, some of which was very eloquently explained by the noble Baroness, Lady Valentine. The allocation of money to projects has startled some people who received it and annoyed a lot of others who did not. Under the current system, there is a serious lack of credibility in this scheme across the country. The Government and the Minister may feel that this is really unfair and unfortunate. They are spending £3.8 billion, so who could possibly object to that? But there has to be a sense of fairness and reasonableness, and there has to be a sense that it has been done by some objective, transparent criteria which can be explained and, if necessary, audited.

I would also suggest that there ought to be a proper flow of information so that people and organisations which might be attracted to bid have a reasonable understanding of the framework in which these bids are to be assessed. If they are unsuccessful, they should have some proper feedback to help them understand why they were not successful and how they might look to the future to secure funding from the fund. The noble Baroness, Lady Valentine, eloquently set out the case for reform. She proposed a system that would, at long last, put in place that objective, transparent and measurable footing—three things completely missing from the current situation.

I also support what the noble Baroness, Lady Taylor of Stevenage, said in relation to her Amendment 50.

The noble Baroness, Lady Valentine, gave some shocking examples. I hope that the Minister is shocked to hear of the position in which young people in Blackpool have been left as a consequence of the on-off, stop-start unpredictability of funding for what is clearly a valuable, core project doing a vital, levelling-up job. Other examples in Norwich and Bradford make the same point. For sure, town deals have had some benefit in some places, but perhaps we would be slightly less optimistic than the noble Baroness was about the comparative effectiveness of the deals. If one were looking at a levelling-up agenda, some of those have landed in the most unlikely seeming places. Other areas which, on the face of it, would seem to be obvious targets for town deals—places which would contribute to the levelling-up agenda should they be funded—have been turned empty away.

I and my colleagues want to see a meaningful, effective transfer of spending power to local communities so that they can start to self-propel the levelling-up process in their areas. The levelling-up fund as currently run is not the right vehicle to achieve that. Organisations and local authorities which see themselves as eligible are almost, by that definition, hard-pressed and short of cash. If they had lots of cash and lots of spare people twiddling their thumbs, they would not be bidding. They would not need to, and they would not succeed. They are operating with shrinking human resources and a loss of cash, and now some of them are in the position where they basically have to do due diligence before they bid to see whether it is worth wasting their time and money when the chance of success is extremely low.

As I understand it, the fund has now been over- subscribed threefold compared with the amount of money handed out. That means that two-thirds of the money spent by local authorities bidding was completely wasted as two-thirds of the bids were unsuccessful. That money essentially has gone completely down the drain and could have gone on educational projects in Blackpool or on social care. Obviously, it could have gone on front-line public services rather than being spent as it was.

From my own second-hand knowledge of bids made by the Metropolitan Borough of Stockport, even when project organisers believed that they had jumped through every hoop put in front of them—and, indeed, had been assured by officials that they had a good bid that looked pretty good for ticking the box—they were rejected and there was no feedback process; it was just, “Sorry about that, you’re not on the list.” So there is no learning from this either, which is surely an essential part of the scheme. My note says that, yes, I am talking about Marple again. There is a community there that feels very bruised by that process.

All these amendments aim to put that right and put in place something that means that, if this funding system is retained—I have grave doubts about whether it is a sensible long-term mechanism—and the levelling-up fund has rounds 4, 5, 6, 9 and 23, and goes right through to 2030, it has a proper system of measurement and evaluation, and objective and transparent processes. There has to be feedback so that there is learning from that process.

This is a desperate plea, because although I will not say that this has been uniquely bad compared with how Governments so often function—that is quite unfair, because there are enough bad things that mean it is not unique—we need to see open and transparent dealing between central government and local communities, a genuine transfer of the power of decision-making to those communities, and a delivery system that is fair and objective. Current experience on the ground is that none of these things is happening.

I urge the Minister, who I regret to say probably will not agree to adopt Amendment 57, to at least acknowledge that there is a problem and say that the Government will work on it. If the Government are committed to a further round of levelling-up funding—I believe they have already announced that there will be another round—will she give the most careful thought to how she can respond to this debate and influence her colleagues as to they can return some functionality and trust in this broken system as they set out on the third round?

My Lords, one of the reasons why I and my colleagues have been so determined that we define geographies, missions and metrics as clearly as we can is that those three criteria should define where the levelling-up funding goes. I totally support Amendment 57 in the name of the noble Baroness, Lady Valentine, for that very reason. Unless those criteria are clearly defined, the Government have the ability to move the money around to those areas they want to have some funding. Unfortunately, that has been the experience to date.

I have raised before and will repeat again, because it is very important, the fact that the House of Commons Library carried out an analysis of the round 1 and round 2 funds for levelling-up bids. It found that, in the first round, the following criteria were set out: economic recovery and growth, improved transport connectivity and the need for regeneration. The majority of that funding, though not all of it, did indeed go to priority 1 local authority areas, which were categorised by the Government.

When it came to round 2, the Government changed the rules, as reported in the House of Commons Library, so that they would move some authorities into priority 1. One of those authorities that moved into priority 1 was Richmondshire in North Yorkshire, which then got another round of funding from these levelling-up bids.

I have to say exactly what my noble friend has just said. When that happens, you lose trust that this is going to be a fair system, and there is a loss of credibility in the claim that what the Government are intending to do is to focus their energy with a laser-like focus on those areas of the country that, by their own statistics, are in desperate need of considerable amounts of government funding. I do not mean just one-off funding, such as in Richmondshire in north Yorkshire to build a pavilion in a park; that does very little for people who are in need of skills, better-paid jobs and the ability to travel to jobs, whose health is poor and who cannot get to national health services easily—it does nothing for them.

So one of the reasons why I was so pleased to see this amendment was that it talks about having long-term and strategic distribution of levelling-up funds. What the Government seem to be doing at the minute is spreading the funding jam across the country to suit their particular needs, rather than putting a significant amount of funding into certain areas to give them a real long-term boost to achieve the missions that we have debated long and hard today and on Monday.

I will again repeat that a town in my area has had City Challenge money, single regeneration round 1, neighbourhood renewal funding, communities funding—and it has now got some levelling-up funding. I have to tell noble Lords that the folk who live there are still living in desperate circumstances, with low-paid jobs, poor housing, poor health and low skills. All that funding has not shifted the dial much at all—we have lovely road signs declaring what town people are in, we have a nice sculpture and a nice market square—but the folk are still living in poor-quality housing with low skills and no particularly great job prospects.

That is what we need to be doing, and that is what we are not doing, so I am hoping that the Minister is going to stand up and say, “This is a really good idea and we’re going to accept the amendment”.

My Lords, this group of amendments is related to the levelling-up fund, which directly supports the mission set out in the White Paper through investment in the infrastructure that improves the everyday lives of local residents across the country, focusing on regenerating town centres and high streets, upgrading local transport and investing in culture and heritage assets. The second round of the levelling-up fund announced by the Government will invest £2.1 billion in 111 local infrastructure projects across the UK, helping to create jobs and spread opportunity right across the country, from the higher education skills campus in Blackpool to the ferry infrastructure in Shetland.

Amendment 50 in the name of the noble Baroness, Lady Taylor of Stevenage, would require government to explain how allocations from the levelling-up fund support the levelling-up missions. I will not speak about Amendment 56 in the name of the noble Lord, Lord Berkeley, as he is not here; we will wait for that to come later. Amendment 57 in the names of the noble Baronesses, Lady Valentine and Lady Hayman of Ullock, and the noble Lord, Lord Stunell, would require government to follow set distribution criteria when allocating levelling-up funding and publish a statement explaining how funding allocations meet these criteria.

Levelling up requires a multifaceted approach, and it is important to recognise that the levelling-up fund is just one part of the Government’s levelling-up strategy and is being delivered as part of a broad package of complementary UK-wide interventions, including the UK shared prosperity fund. A total of £9.6 billion from levelling-up related funds has been allocated from my department alone across the UK since 2019. This is in addition to the 30-year £7.5 billion commitment to the nine city-based mayoral combined authorities in England. Furthermore, the UK Government, devolved Administrations, local authorities and businesses are together delivering more than £11 billion of public and private investment into city deals in Scotland, Wales and Northern Ireland.

Across government, there is an extensive funding envelope contributing to the delivery of the levelling-up agenda. This includes: a £40 million pot from the Department for Education between 24 priority areas of 55 education investment areas; £5.7 billion investment from the Department for Transport into transport in key city regions; £1 billion from the Department for Transport for the bus service improvement plan; a £125 million pot from the Home Office for the safer streets fund; £5 billion invested by the Department for Culture, Media and Sport in the Project Gigabit programme; and a £48 million pot from the Department for Culture, Media and Sport for the cultural investment fund, with an additional £128 million to be distributed.

The levelling-up fund empowers areas to identify and bring forward genuine priorities while consolidating and simplifying the historic set of funding pots. The competitive process has played an important role in driving up quality. Only the strongest bids were shortlisted. Every project submitted is robustly assessed, including on deliverability, to ensure that it can deliver high-quality outcomes for residents in a timely manner. Strength of bids was always a key factor in driving the selection of successful bids, as is clear from our published Explanatory Notes. As we committed to in the Public Accounts Committee report on local economic growth, we have published thematic and geographic information about all the successful and unsuccessful bidders.

Noble Lords mentioned support for local authorities. Local authorities in Scotland, Wales and Northern Ireland and top-tier councils in England received support of £125,000 for extra capacity to help support their bids. The department has gone back to all local authorities that made unsuccessful bids to help them and to give them feedback for round 3, should they require it.

As far as inflation is concerned, we are monitoring the situation closely with the formal monitoring mechanisms. We have already agreed a £65 million package of support for local authorities to help ensure that they have the necessary capability to deliver their projects. We are supporting local authorities through all this, of course.

I was concerned by the comments from the noble Baroness, Lady Valentine, about the Blackpool education funds. I do not know about this—it is not my department —but I will certainly look into it and come back to her, because that does not seem correct to me.

To clarify, the bids in the levelling-up fund need to be delivered by 2025 and not by next year. I will reiterate what I said to the noble Baroness, Lady Pinnock, on where the money went. Once again, the majority of money per head of population in the last round of bidding for levelling-up funds went first to Wales, then to the north-west and then to the north-east. I suggest that these are areas that probably needed that levelling-up money.

The Government have committed to a further round of investment through the levelling-up fund and will reflect on the learnings from rounds 1 and 2 when we are designing that fund for the future. Local authorities are encouraged to secure wider match funding to supplement the Government’s contributions provided under the levelling-up fund to support the successful delivery of their projects. But it would not be fair to place restrictions on what local authorities are able to access, which could impede the overall delivery of their schemes and the delivery of wider benefits to the public.

Amendment 502, tabled by the noble Baroness, Lady Hayman of Ullock, would put into law the requirement to review the effectiveness of the levelling-up fund bidding process. Local government consistently points to the inefficiency, decision-making complexity and reporting burdens that result from the number of local funding pots and the strings attached to them. We are listening to that, and initial steps have been taken to address that complexity. I think I have said that more than once at this Dispatch Box. We need to address the complexities in the funding landscape and, as announced in the White Paper, the Government will set out a plan for streamlining the funding landscape, which will include a commitment to help local stakeholders navigate funding opportunities. Adding additional reporting requirements on the link between specific allocations and the missions would undermine that objective.

This Government are transparent about their use and allocation of public funds, including levelling-up funds, and these amendments are unnecessary. I ask the noble Baroness to withdraw her amendment.

Can I clarify my involvement with the various areas I have been talking about? I work some of the time with Business in the Community to persuade businesses to get involved in levelling up in all sorts of places across the country, including Blackpool, Bradford, Rochdale, Sheffield and many other places.

I thank the noble Baroness for that and for the work she is doing in encouraging the private sector to get involved.

We have had a bit of a discussion about priority areas 1, 2 and 3. I would be grateful if the Minister could write and let us know what criteria the Government use to categorise areas and how, between the first and second round, some moved into category 1. I do not know whether any moved down. It would be useful to have that information.

I thank noble Lords for the debate on the levelling-up fund. It is a key issue to discuss as we go into the Bill because, clearly, none of the levelling-up project will happen without proper funding, and most of us in local government certainly feel that the levelling-up fund has not been the way to do it.

I want to start with the issue of categories 1, 2 and 3. Those categories deterred some authorities from applying because people felt that, if they were in a higher-banded category, they would not have any chance of getting any funding. It was very disappointing when they did not bid because they thought they were not going to get any and then found that others in the same category, and some in higher categories, were allocated funding. So I support the request from the noble Baroness, Lady Pinnock, for some explanation of how that banding works.

My second point is about how the Treasury is feeling about round 3. I am not clear on what the Treasury has done in terms of the levelling-up fund: whether it has stopped round 3 for the time being, whether it has delayed it or what it is doing with it. It would be interesting to know how that is going to happen going forward.

The Minister mentioned match funding, and I am sure that she is as aware as I am that the various places that it used to come from are scarce and in very short supply these days. So match funding can also deter people from bidding for things. I know that it is not compulsory to have it, but, if you think you will not achieve your bid without it, it may deter people from bidding in the first place. It seems almost certain that the areas that need match funding the most are the least likely to have access to it, so it goes against the principles of levelling up.

I was pleased to hear the Minister talk about the recognition of the need to address the complexities in the funding landscape, which is vital. Moving forward, as the delivery of the missions gets more complex, we absolutely need to be clear about a straightforward mechanism for funding.

I was pleased to hear the speech of the noble Baroness, Lady Valentine, which was helpful. I am grateful for the work that Business in the Community does across the country in helping to move the levelling-up agenda forward. I was impressed and pleased that she mentioned the issue around capital funding and having revenue funding to support it. Too often, funding pots are allocated and things are built and delivered—because that is what ticks the box for the department concerned—but the ongoing revenue for that project is not considered and ends up being a local burden that can, in some instances, result in the original project never being delivered properly, because there is not the revenue to deliver it. So I hope that future funding pots will take that into consideration.

I was shocked about the Blackpool project being funded but then going into a period in which it is not. You cannot stand these projects up and down at very short notice: they take a lot of planning, and the disappointment for young people engaged in something when the tap is turned off and that project stops is almost worse than doing nothing at all, because it adds to their feelings of having things taken away from them.

On the short timescales and short delivery times, if levelling up is going to work properly, it must work with a great spirit of co-operation and collaboration between those tasked with delivering it—there may be more than one public agency doing that. Having these very short bidding times and delivery times in some instances is not at all helpful, and I hope that that can be taken into consideration.

We heard information about the town deals and the towns fund. I have been quite close to one of them, and, although there is an equal lack of transparency in allocation, there was very serious scrutiny of what the outcomes would be before the bidding and allocation. That is something that we should look to for the future.

I was pleased to hear the remarks of the noble Lord, Lord Stunell, about the serious lack of credibility in the scheme. I talk to my colleagues in local government all the time, and there is no doubt in my mind that there has been a great loss of credibility in the scheme. The Minister referred to a feedback process; it may be that that has got going fairly recently, because the second-round funding has only recently been announced. But those who were involved at the time certainly felt that they had not had an adequate opportunity to receive any feedback. Of course, they want to learn because, if there will be multiple rounds of this, people want to know what they did wrong and, equally, the ones who got it right want to know what they did right.

The noble Baroness, Lady Pinnock, referred to the reason we have been pressing so hard on these definitions of geography, missions and metrics, and how they will be used: because of how they will be used to determine funding. Even if funding for levelling up were to be considered for a completely different model—such as one much more like the sort of model I would like to see, which is local government being given the funding and being allowed to get on with it—surely we must have a method which determines how funding follows need, rather than just whoever puts in the shiniest bid at the time.

I take the Minister’s points—she gave a long list of funding pots that have been allocated, and she spoke about the competitive process playing a strong part—but we have to balance that against the cost and concerns of wasted funding in that bidding process. If the Public Accounts Committee’s data has all been published and is all open and transparent, I am interested to know just what the Treasury has concerns over, because, surely, it would have access to that too.

That said, I will withdraw the amendment for now, and I am sure that we can talk about the way that levelling up is funded long into the future—but, I hope, not long into the night.

Amendment 50 withdrawn.

House resumed.

House adjourned at 9.46 pm.