Levelling Up Secretary Michael Gove told MPs this week that there was no evidence of any abuse of levelling-up funds. ‘If anyone has it, I hope that they will bring it to the House’s attention’, he said when answering questions in the Commons.
Gove told MPs that he ‘abjures’ the whole idea of pork-barrels politics – the practice of distributing government funds, contracts or other benefits to political friends and supporters.
This website today examines the evidence relevant to levelling-up grants that have so far come to the North East and finds, if not clear-cut abuse or blatant pork-barrel politics, at least that levelling-up grants so far have gone disproportionately to areas that have signed devolution deals with the government and to Conservative constituencies.
Examining three major funds, the £4.8bn Levelling Up Fund (LUF), £3.6bn Towns Fund and £1bn Future High Streets Fund (FHSF), we find that the region as a whole has received £370m. It has also received £7.3m from the much smaller £220m Community Renewal Fund (CRF) and £150m Community Ownership Fund (COF).
(See table below)
North of Tyne and Tees Valley, both with devolution deals and 56% of the region’s population between them, have received 66% of the three major funds. If one subtracts grants to much-favoured Bishop Auckland (see below), which is part of un-devolved County Durham, the devolved areas have received 83%.
Only when competing for crumbs from the smaller CRF and COF have the four south of Tyne councils without a devolution deal – Gateshead, South Tyneside, Sunderland and County Durham – fared relatively well, picking up 63% of the £7.3m that has come to the region.
Comparing constituencies by party affiliation, the region’s 11 Conservative seats have so far shared £227m (61% of the total) while the 18 Labour seats have received £143m (39%).
Four constituencies in particular stand out as being ‘red wall’ seats that fell to the Conservatives in 2019 and as having been relatively well provided with levelling-up grants. Bishop Auckland has received a grant from each of the three major funds, receiving £73.1m altogether. Blyth Valley has received two grants of £32m, Stockton South two of £43.9m and Redcar two of £30.8m.
That is not to say some other places have not fared comparatively well too, noticeably Sunderland Central (two grants, £45m) and Middlesbrough (two grants of £36.1m), both with Labour MPs.
Meanwhile, constituencies that have received nothing include those of cabinet ministers Anne-Marie Trevelyan (Berwick) and Simon Clarke (Middlesbrough South and East Cleveland) and junior minister Guy Opperman (Hexham) – all in areas with devolution deals.
There has been nothing either for Conservative previous ‘red wall’ seats in North West Durham and Sedgefield as well as the traditional Labour constituencies of Wansbeck, Tynemouth, North Tyneside, Newcastle East, Blaydon, Gateshead, Jarrow, Washington and Sunderland West, Houghton and Sunderland South, North Durham, City of Durham and Easington.
The LUF, according to the government, ‘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 overarching aims of the Towns Fund’, according to its website, ‘are to drive the sustainable economic regeneration of towns to deliver long term economic and productivity growth’.
The aim of the FHSF, now incorporated into the Towns Fund, is ‘to renew and reshape town centres and high streets in a way that drives growth, improves experience and ensures future sustainability’.
The purpose of the CRF is to help places across the UK prepare for the introduction of the larger UK Shared Prosperity Fund, due to be introduced in April as a replacement for the European Regional Development Fund and European Social Fund. It will, says the government, be ‘contributing to the levelling up agenda by investing in people, places, businesses and communities improving everyday life across the UK’.
The COF ‘aims to drive greater ownership of assets which support the social well-being of communities but are at risk of loss. The fund hopes to ensure that important parts of the local social fabric such as pubs, sports clubs, theatres, and post office buildings can continue to play a central role in communities across the UK’.
Gove assured MPs in House of Commons questions that levelling up funds are distributed fairly and not to boost party political interests. He told one MP who put the idea to him: ‘The levelling-up fund is allocated according to objective criteria, including value for money, strategic fit, deliverability and the characteristics of place’
He told another MP: ‘We work with people across this House, including and especially in the Labour party, to ensure that funding goes where it is required. Lying behind the allegations made by him and others is a suggestion that somehow civil servants would conspire with Ministers deliberately to favour constituencies on the basis of political colouration’.
Gove also gave a hint of the answer that may be provided in the forthcoming Levelling Up White Paper to one of the key questions about how levelling up will work – whether it will be directed solely at lagging regions like the North East to help them catch up or whether other parts of the country can also expect a share of the available funding. Given that the distribution of funds so far has been widespread, his answer should come as no surprise, nor should the fact that he appeared to be trying to please everyone.
Asked by the MP for the South Coast constituency of Gosport whether her area could hope to attract funding, Gove replied: ‘While in levelling up we must have a proper focus on the midlands and the north, other parts of the United Kingdom, including the area around the Solent—Gosport, Portsmouth and Southampton—also require investment.
The research presented here into the distribution of levelling up funds is not conclusive proof of ‘pork-barrel’ politics, but it is enough to put North East politicians on a high state of alert.
There are reasons why certain areas may have received funding while others, apparently just as deserving, have not. In what is a competitive process, some bids may not have been as well prepared as others. Some may not have been ready in time. In some cases bids may not have been made at all. Answers are to be sought in town and county halls as well as Whitehall.
Only £1.7bn of the largest fund involved, the £4.8bn LUF, has so far been distributed and there is time for imbalances to be corrected. They should be, if Gove and his fellow ministers are to continue escaping the accusation of using public money to favour their political friends.
The fact that Sunderland and Gateshead have received five and four CRF grants respectively could bode well for the future, as these grants are to help prepare for future grants from the larger UK Shared Prosperity Fund.
The funds discussed here are not the only drivers of economic development in the region being supported by the government. Blyth and next-door Wansbeck are benefiting from a 3,000-job Britishvolt battery factory and Sunderland and South Tyneside from a similar Envision plant, as well as the development of electric vehicles at Nissan, all reportedly with government support.
Newcastle city centre, meanwhile, will get a boost when 9,000 HMRC civil servants move into a new office complex (from elsewhere in the region). While this is not a specific levelling up measure it will have levelling up effects, including enhanced pride of place. The same applies to a new conference and arena complex being built at Gateshead Quays, a project initiated by the local council years before the government launched its levelling up agenda.
In spite of these initiatives however, whether driven by the private sector or local government, the North East’s failure to agree a devolution deal embracing all seven councils north and south of the Tyne puts it at a disadvantage in relation to government funding of all sorts, notably transport, as this website has pointed out time and again in the past year. The evidence here suggests prima facie that the distribution of levelling up funds is another example.
NORTH EAST LEVELLING UP GRANTS BY CONSTITUENCY AND LOCAL/COMBINED AUTHORITY
|CONSTITUENCY||Party||Devolution||LUF (£4.8bn)||Towns Fund (£3.6bn)||FHSF (£1bn)||Community Renewal Fund (£220m)||Community Ownership Fund (£150m)|
|Washington and Sunderland West||Lab||No|
|Houghton and Sunderland South||Lab||No|
|North West Durham||Con||No|
|City of Durham||Lab||No|
|Middlesbrough South and East Cleveland||Con||Yes|
|LOCAL OR COMBINED AUTHORITY|
|Durham County Council||No||£836,729|
|North Tyneside Council||Yes||£600,000 (2 bids)|
|Gateshead Council||No||£2,184,800 (4 bids)|
|North of Tyne CA||Yes||£,538,412 (2 bids)|
|Sunderland City Council||No||£1,594,967 (five bids)|
|Tees Valley CA||Yes||£1,562,857 (two bids)|