North East Devolution and Levelling Up

MPs doubt if levelling up funds will be enough

MPs on the Treasury Select Committee have cast doubt on whether the government will provide enough funding to achieve its levelling up ambitions, highlighting in particular the reduced amount being made available through the UK Shared Prosperity Fund (SPF) compared with the EU regional funds it will replace.

The SPF will provide only 60% of what was available under EU funding between 2014 and 2021.

The Committee is also critical of lack of clarity over how the success of levelling up will be measured.

They are concerned that instead of having control over sufficient funds to maintain local facilities and services on an ongoing basis, local authorities will instead have to bid for periodic sums handed down from Whitehall.

The Department for Levelling Up, Housing and Communities (DLUHC), from which these sums will come will have a budget that is flat or falling once the rising cost of social care is taken into account, warn the MPs..

In a report on the Autumn 2021 Budget and Spending Review (paragraphs 77-79), the committee says: ‘The Spending Review described how levelling up was being incorporated into many aspects of government policy. We await more specific detail on how levelling up will be measured and achieved. Rebadging existing programmes may not have the impact the government is seeking.

‘The government stated that the SPF will be the successor to the EU Structural Investment Funds. However, the government is only providing to this new fund 60% of the money provided by the EU fund.

‘If the new fund is intended to be one of “the centrepieces” of the government’s ambition, it is surprising that the size of the fund is being reduced to such an extent. The government will need to demonstrate how these reduced funds will achieve their defined metrics for levelling up.

‘Significant elements of the government’s levelling up agenda will be delivered through the DLUHC. However, once the increases in social care funding are excluded, the spending power for this department’s activities are being kept flat or falling.

‘If the levelling up agenda is to be carried out in a sustainable way, it may be that this will need to be reflected in the spending power of the DLUHC. This committee awaits this Department’s forthcoming White Paper to understand how levelling up will be measured and achieved within the budgets announced’.

The Treasury Committee’s report comes within days of another from the Northern Powerhouse Partnership, Teesside University and the Joseph Rowntree Foundation, featured on the website on January 24, which also warned of funding cuts for levelling up.

That report warned that the North East faced a cut of 39% for levelling up – almost exactly the same as the 40% reduction referred to by the Treasury Committee.

The North East and other economically lagging regions of northern England and the Midlands will not have much longer to wait to learn more about the government’s plans, with the delayed Levelling Up White Paper now due to be published in the coming week.