‘Levelling-up fund’ is thin and cynical

Five days after the 2021 Budget, are we any clearer what “levelling up” means?

One thing is clear. It doesn’t mean investing to tackle London’s problems, even after the damage done to the capital by the pandemic. Only two of London’s boroughs (Newham and Barking & Dagenham) are included in the priority tier of local authorities eligible for the new £4.8 billion Levelling Up Fund. The three prioritising ‘place characteristics’ set out in the Fund’s Prospectus could have been designed to exclude the capital:

  • Need for economic recovery and growth;
  • Need for improved transport connectivity; and
  • Need for regeneration.

It’s not yet clear how these are quantified and compared (or precisely what “regeneration” means), but the first two work well enough to rule out London, which is distinguished by a persistent mixture of dynamism and deprivation alongside an enviable transport network. Boroughs like Westminster and Tower Hamlets have intense poverty among their residents, but also have three times the economic output per head of the UK as a whole, and twice that of other big cities like Manchester, Belfast and Edinburgh.

So this is not a fund for London, or for investing in the needs of people rather than place. And there is a case to be made for that: even London’s most fervent advocates would recognise that there are places in the UK that urgently need investment in connectivity and economic activity. You could even see a precursor in Michael Heseltine’s City Challenge programme of the early 1990s: selecting and investing heavily in a few urban centres, following a bidding process, which would in turn power up new enterprise and opportunity around them.

But that doesn’t seem to be how this Fund will be applied. The prospectus invites local authorities to submit one bid each for up to £20 million (£50 million in exceptional cases for big transport projects). Twenty million is a substantial sum, but hardly transformative – and significantly less than was allocated to City Challenge bidders 30 years ago, when 20 cities received £37.5 million each (around £72 million in today’s money). Assuming £2 billion is handed out in the first round, this would enable 100 bids to be funded. It looks as if spreading the jam wide and thin is the priority.

This may also explain the variety of places in the priority tier. It includes most major city centres (apart from London and also struggling smaller cities like Sheffield, Plymouth and Portsmouth). But it also comprises “Red Wall” marginals and prosperous suburbs and rural areas such as Richmondshire (I suspect to the Chancellor’s embarrassment), Lewes and Trafford.

Poverty is not confined to the inner cities, but not every smaller town and rural area is struggling either. Some lack economic powerhouses and transport hubs, but nevertheless have prosperous populations of commuters and retired people. You can see the government’s problem here: it is hard to distinguish struggling from successful smaller towns without giving a higher weighting to deprivation measures, and  doing that would have pushed the focus back towards London and the other big cities.

The language of the prospectus seems to fudge things further. It makes a very tentative and non-economic case for infrastructure investment:

“Investing in infrastructure has the potential to improve lives by giving people pride in their local communities; bringing more places across the UK closer to opportunity; and demonstrating that government can visibly deliver against the diverse needs of all places and all geographies.”

Elsewhere, the prospectus talks about funding projects that “bring pride to a local area”, about “infrastructure that has a visible impact on people and their communities”. It starts to sound as if the purpose of the fund is performative. It aims to give the appearance of activity and impact in the next three years, redeeming the electoral promise made to “Red Wall’ constituencies, rather than seeking any lasting change, let alone the type of economic rebalancing that has evaded ministers for decades.

Either I’m being deeply cynical or the Levelling Up Fund is. There’s no sense of strategy, of how “levelling up” might be achieved, or even of what it is. A bold government could focus a critical mass of investment on the places and projects that could maximise prosperity and opportunity, or it could hand funding over to local politicians to allocate in line with local priorities. Instead, we have the continuation of centralised munificence, infrastructure investment by supplication.

The Mayor of London and borough leaders have expressed anger at how the Levelling Up Fund has ignored London’s needs. If I was leader of a northern city, I might be angrier still.

[First published in OnLondon, 7 March 2021]

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