Levelling Up - what does it mean really?
As is becoming the theme; #Budget2021 wasn't just a series of tax slashes and hikes.
There were hints of, and actual, drafts of, new policies woven in. My summary of the most relevant bits for planning is here. In the next few paragraphs I am going to take a brief look at the Leveling Up Fund. The concept of "levelling-up" was referred to 3-4 times in Rishi Sunak's speech and he concentrated on an aim to design policy to bring investment, trade, and, most importantly, jobs, right across this country.
The Minister of Housing, Communities & Local Government's thoughts are here; also highlighting that the fund will available to communities in all UK nations, with up to £4.8 billion available for local infrastructure across the UK. It will be allocated competitively to be used to invest in local infrastructure that has a visible impact on people and their communities – including regenerating town centres and high streets, investing in local transport schemes, and upgrading local culture and heritage assets. It is one of three new investment programmes highlighted to help support local economic growth; the other two being the UK Community Renewal Fund and the Community Ownership Fund (Nicola's views on that are here).
Question is; does it do that?
What is it?
The £4.8 billion Levelling Up Fund will invest in infrastructure that improves everyday life across the UK. The full Prospectus for the Fund is here. This prospectus sets out how local areas can access the first round of funding. It is a consolidation of the Local Growth Fund and Towns Fund. The key objectives of the fund are:
- economic recovery and growth ;
- improved transport connectivity;
- regeneration.
What should it be spent on?
It is a fund for high value local infrastructure; but not that high - as there is a cap of £20 million; with an exception for road schemes of £20 - 50 million.
The deadline for funding applications is noon on Friday 18 June 2021; given the typical speed of local government decision making the fund is not going to be spent on anything new or innovative this time around but on getting stalled and (hopefully) much needed local schemes back on track. The kind of schemes that have been talked about or in planning for a few months or years already.
* with a lot of LPA's about to head into a purdah period for their elections it is still questionable how many will be able to meet a June deadline on what appears to be a politically loaded decision?
Where is it most applicable?
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. It sounds like a very specific nod to trying to keep the "red wall seats" the Conservatives gained in the last election.
Capacity funding will be allocated to local authorities most in need of levelling up in England, as identified in the index published alongside the prospectus (the methodology for which is here). The index places local authorities into categories 1,2 or 3, depending on their identified level of need, with category 1 representing places deemed in most need of investment through this Fund. Standard metrics were used in relation to each of the main objectives, i.e.
- productivity, measured using gross value added (GVA) per hour;
- 16+ Unemployment rate;
- average journey times to employment centres by car, public transport and bike.
- commercial and dwelling vacancy rates.
Whilst I haven't done a detailed analysis it is difficult to spot many locations south of Northampton in tier 1.
A flat £125,000 of capacity funding will be allocated to all eligible (tier 1) local authorities. This capacity funding will be provided with the primary intention of supporting the relevant local authorities to develop their bids for later rounds of the Fund. (I'm already an old cynic who hates forms and I'm not yet 40 - but you certainly have to question the efficacy of a fund where the first £125k is allocated to helping you with the application process itself).
While preference will be given to bids from higher priority areas, the bandings do not represent eligibility criteria, nor the amount or number of bids a place can submit. Bids from categories 2 and 3 will still be considered for funding on their merits of deliverability, value for money and strategic fit, and could still be successful if they are of exceptionally high quality.
But how political does it really need to be?
Members of Parliament, as democratically-elected representatives of the area, are expected to champion one bid that they see as a priority. The number of bids that a local authority in the first category can make will relate to the number of MPs in their area. Accordingly, local authorities can submit one bid for every MP whose constituency lies wholly within their boundary. Every local authority can submit at least one bid. Where an MP’s constituency crosses multiple local authorities, one local authority should take responsibility as the lead bidder and local areas should work together to designate that lead bidder. MHCLG will engage with local government on whether any further guidance would be helpful on who should be designated ‘lead bidders’ in these circumstances.
Whilst the fund is clearly aimed at levelling up across the regions and the old north/south divide this is likely to exacerbate any town v country divide. Deprived country locations are by definition less populated with each MP representing approximately 92,000 constituents.
Early doors focus - 2021-22.
The first round of the Fund will focus on three themes:
- smaller transport projects that make a genuine difference to local areas;
- town centre and high street regeneration; and
- support for maintaining and expanding the UK’s world-leading portfolio of cultural and heritage assets.
Projects should be aligned to and support Net Zero goals.
It is expected that local authorities will not be able to use the capacity funding in time to support bids for the first round and that it will instead support the development of proposals for later bidding rounds.
You only get 3 wishes, don't waste them...
In a move reminiscent of Will Smith in Disney's Aladdin, local authorities can only have one successful bid for each of their allocated number of bids over the lifecycle of the Fund. Local authorities are therefore encouraged to consider whether bids that they wish to submit for the first round of the Fund reflect their local priorities, or if they should wait until later rounds so that they have more time to consider and develop their proposals.
Does the combination of the capacity fund, and the "you can only win once" policy actually put the tier 1 areas (those in most need) at an disadvantage in the first round of applications; since they are being incentivised to wait for the next round and submit an A Grade application?
So how is the funding awarded?
Bids will then be "graded" against the following criteria: -
- Characteristics of the place - investment will be prioritised for local areas that are most in need of levelling up, with category 1 representing the highest level of identified need.
- Deliverability - all bids will be assessed for the evidence of clear and robust delivery and procurement plans, governance structures and project costings. A contribution will be expected from private sector stakeholders, such as developers, if they stand to benefit from a specific project. No real comment or input on how this is to be assessed or clawed back - but clearly those schemes already envisaged and catered for in s.106 / CIL policies may have an advantage here.
- Strategic fit with local priorities - set out a compelling case for why the proposed investment supports the economic, community and cultural priorities of their local area.
- Value for money - where applicable adhering to the social value in government procurement framework (see Procurement Policy Note PPN 06/20) or the balanced scorecard.
On reflection the Fund seems well intentioned but it is questionable whether the detail of it has already set it up to fail in its noble intention to level up. Will those most in need be deferring their applications for another year or 2 with those more experienced, with part done schemes (needing finishing), set to be first to benefit?
It will be allocated competitively to be used to invest in local infrastructure that has a visible impact on people and their communities – including regenerating town centres and high streets, investing in local transport schemes, and upgrading local culture and heritage assets.”
