PM defends Levelling Up funding and denies it favours South East
On Friday morning, Chancellor Jeremy Hunt described the “over-concentration of wealth in the South East” as a weakness of the UK economy. This reflects the core of the Government’s levelling up agenda – as the projects selected to receive funds from the second round were unveiled last week. An analysis of the combined awards so far by Express.co.uk has revealed a picture that strays from the core ideal of improving the outcomes in the most struggling parts of the country: while some areas in dire need were omitted entirely, other wealthy spots were lavished in cash.
Levelling Up — how it’s meant to work
The concept of “levelling up” was first touted in the 2019 Conservative Party manifesto, helping Boris Johnson secure his landslide 80-seat majority in the weeks before Christmas.
On paper, the policy aims to reduce the economic imbalances between areas and social groups across the UK. In practice, money comes from a £4.8billion Levelling Up Fund, with cash distributed on the basis of successful bids from local authorities or similar institutions in three separate competitive rounds.
A total of £1.7billion was put towards 105 winning projects in the first round in October 2021. A further £2.1billion was dispensed to 111 proposals in January 2023. Just £1billion remains to be allocated in Round 3, the timeframe of which is yet to be announced.
Introducing the prospectus in March 2021, then-Chancellor Rishi Sunak said: “While the Fund is open to every local area, it is especially intended to support investment in places where it can make the biggest difference to everyday life, including ex-industrial areas, deprived towns and coastal communities.”
The North East has received the least amount of funding in Great Britain despite needing it most (Image: GETTY, EXPRESS)
Where was the funding needed most?
Looking at figures for 2019 so as to avoid the distorting effects of the pandemic, of all of the UK’s 12 regions, gross domestic product (GDP) – the value of all goods and services produced in a year – was lowest in Northern Ireland (£48,6billion), the North East (£64.3billion) and Wales (£77.5billion), according to the Office for National Statistics (ONS).
Over the past two decades, although economic output increased in all UK regions, the GDP gap widened significantly between London and the South East and the rest of the country. Growth was distinctly low in the three areas with the smallest regional economies today.
Accounting for imbalances in population, GDP per capita is a more appropriate indicator of how well people are faring. The bottom of the scale tells a similar story: the North East is worst-off (£24,068), followed by Wales (£24,586) and Northern Ireland (£25,656).
Zooming in further to local authority level, the farthest behind in 2019 were found to be Castle Point in Essex (£14,505), East Renfrewshire in Scotland (£14,959) and Gosport in Hampshire (£15,537).
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Levelling Up Secretary Michael Gove addressed the Convention of the North in Manchester this week (Image: GETTY)
So where has the funding actually gone?
On a national level, combining the successful bids of Round 1 and Round 2, Northern Ireland received just 3.17 percent of the total funds awarded (£119.9million) – a smaller share than any other region despite being among the most disadvantaged of all. With just 4.46 percent of the pie (£168.5million), the North East got the second-smallest amount.
And on the local level, of the poorest ten percent of the UK’s 374 local authorities in terms of GDP per capita in 2019, 17 (44.74 percent) did not receive a penny from the Levelling Up Fund. Despite making up the most deprived places in the country, they received just a 9.45 share of the Fund – less than they would have got had an equal amount been dispensed to all.
The Northern Powerhouse Partnership (NPP) believes the poorest areas should have been guaranteed an allocation. According to their analysis, the 30 most deprived councils missed out £990million worth of funding as a result.
Henri Murison, Chief Executive of the NPP said: “These local government beauty pageants are not only wasteful of public money, having cost at least £27million so far just in bidding costs, but largely unnecessary.”
“Michael Gove claimed at the Convention of the North that these competitions drive innovation, but in practice all last week’s torrid treatment of the North did was make the case for more control to sit here,” he added.
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According to the Government’s updated Index of Priority Places, of the 139 categorised as top priority, 34 – just under a quarter – received no funding at all over both rounds.
Castle Point – the local authority with the lowest GDP per capita in the UK – is yet to submit a bid but confirmed it is planning to do so in the final round. Second-poorest East Renfrewshire’s Round 2 bid was rejected. Council Leader Owen O’Donnell said: “It is very disappointing our Levelling Up fund application to support regeneration projects in Barrhead and Thornliebank was unsuccessful.
“The plans would have made a real difference for our residents and businesses – improving the local surroundings and delivering much-needed community facilities.” Third-poorest Gosport’s proposals also came to nothing.
Upon having their £50million bid to rejuvenate the town centre of the East Midlands market town of Arnold fail for a second time, deputy leader of Gedling Borough Council, Labour Councillor Michael Payne told Express.co.uk: “In their 2019 general election manifesto, the Conservative Party promised to ‘level up every part of the United Kingdom’ but in Gedling they’ve failed miserably on that promise.
“The Prime Minister could find £19million of levelling up funding for his own constituency but couldn’t allocate a single penny to Gedling’s committee. For residents living in Gedling, it’s crystal clear that under the Conservatives levelling up is nothing more than warm words and no action.”
Rishi Sunak and Jeremy Hunt attach a levelling up plaque to Accrington Market Hall on January 19 (Image: GETTY)
So is it all just politics?
An analysis of Round 1 funding by the Centre for Inequality and Levelling Up at the University of West London found projects in Conservative constituencies received £790million, compared to £636million in Labour ones. Research into Round 2 by the BBC found £1.21billion flowed into Tory seats and just £471million to those held by the Opposition.
A Government spokesperson said: “The Levelling Up Fund is investing in infrastructure that improves everyday life across the UK, spreading opportunity to historically overlooked areas. All projects were subject to a rigorous assessment process under robust, fair and transparent rules, with no involvement of local MPs in the selection process.”
But what about in terms of which party controls the local council? Following the 2022 council elections, of the 398 local authorities across the UK, 128 were controlled outright – leader or mayor as well as majority cabinet control when applicable – by the Conservatives, 85 by Labour, 26 by the Liberal Democrats, ten by independents and five by other parties. There was no outright control in the remaining 145.
The total Round 2 funds won by local governments headed by the Conservatives and Labour was found to be roughly equal, at just under 27 percent each – despite the fact that the Tories hold considerably more councils.
Marcus Johns, research Fellow at the Institute for Public Policy Research North, told Express.co.uk: “[The Levelling Up Fund] is too small, poorly designed, and has been beset by many delays. Competitive bidding is a barrier to levelling up, letting many places left out of levelling up.
“The fact that decisions about the fund have been so opaque and so much lies at ministers’ discretion is even worse. It is undermining confidence in the fund and in this Government’s commitment to addressing regional inequalities and levelling up.”
