The UK Government’s manifesto pledge to “level up” deprived parts of the UK is failing, according to a new report.
The UK Parliament’s cross-party Levelling Up, Housing and Communities (LUHC) Committee has said the aim to level up the country risks failure unless the Government can provide the long-term substantive funding necessary to help local councils to deliver economic growth for their communities.
Levelling up was a key part of Boris Johnson’s 2019 election manifesto. However the committee's report is critical of the funding, delivery, allocation and funding methods and the competitive bidding processes involved in levelling up funds. The report finds that the Department for Levelling Up, Housing and Communities has limited strategic oversight and has failed to coordinate these funds across departments.
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Clive Betts, chair of the committee, said: “There is cross-party consensus in tackling the regional and local inequalities that are holding back communities across the country. But the complexity of the levelling up challenges mean they cannot be remedied by the Government’s current approach of one-off short-term initiatives.
“The Government should heed the lessons of projects such as German reunification which were accompanied by long-term funding and internationally recognised for the benefits delivered in terms of long-term, substantive growth. The levelling up policy requires a long-term and substantive strategy and funding approach, elements this policy currently lacks. Without this shift, Levelling Up risks joining the short-term Government growth initiatives which came before it.
“The Department for Levelling Up, Housing and Communities (DLUHC) is primarily responsible for delivering levelling up but is currently failing to drive forward the policy across Government. It’s concerning that DLUHC does not even appear to know which pots of money across Government contribute towards levelling up. The lack of strategic oversight from DLUHC of how levelling up is delivered across Whitehall raises doubts about whether the policy can be successfully delivered.”
Wales remains one of the most deprived parts of the UK with a third of children living in poverty. It is also really lacking in terms of infrastructure with only a fraction of Welsh railways electrified compared to England and Scotland.
The Committee’s report notes, in contradiction to DLUHC’s evidence, that devolved governments in Scotland, Wales and Northern Ireland pointed to a stark lack of meaningful consultation and engagement on the creation, compatibility, and implementation of levelling up funds including the UK Shared Prosperity Fund.
A Welsh Government spokesman said that they “welcome this report and share the committee’s serious concerns”. He added: “The Levelling Up process has left Wales with less say over less money within a chaotic system that is failing to support the jobs, projects and services in the places that need them. The UK approach has also rolled back devolution by centralising all decisions in Whitehall.”
Former Wales secretary Alun Cairns admitted last year that the Conservatives had deliberately misled people in Wales before the election about how funds that came from the EU would be spent.
“Wales is £1.1bn worse off as a result of the UK Government’s failure to meet its pledge to replace previous EU funds in full,” the Welsh Government spokesman added. "The Welsh Government previously used these funds to help tackle unemployment, deliver apprenticeships, invest in new industries and build new schools among other investments. Universities were also supported in a system that provided certainty for those pioneering the creation of skilled, quality employment. Under the UK Levelling Up regime, more than 1,000 high quality jobs in research and innovation are being lost in Wales as universities cannot access these funds.
“The UK Government should stop taking decisions in devolved areas and restore these funds to Wales.”
The Committee’s report highlights that local authorities have seen revenue funding from central Government significantly reduced since 2010 and notes that levelling up funds generally do not replace grant funding because they are capital not revenue and that they cover specific projects rather than necessarily covering the priorities of the local authorities.
The report recommends that, as a starting principle, local authorities who most require prioritising within the Levelling Up policy should be allocated money through revenue to achieve objectives in line with their local circumstances and need.
The report recommends a change in approach within DLUHC and across Government when it comes to funding for levelling up to ensure that local authorities are given the flexibility to use allocated funds in the most effective way they can. The report calls on DLUHC to move away from an overemphasis on bid and judgement-based funding pots which may impede effective local decision-making.
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