Revealed: levelling up fund allocated south-east twice as much as north-east

Who gets the Magic Sauce? – Owl

The south-east of England, the most affluent region in Britain outside London, last year received almost twice as much money as the north-east from the government’s levelling up fund aimed at boosting deprived areas.

Jon Ungoed-Thomas 

Projects in the south-east benefited from £9.2m from the fund in the year to 31 March 2022. By comparison, the north-east only received £4.9m, despite being the poorest region in Britain by disposable household income.

The £4.8bn fund is under scrutiny over its failure to date to deliver to some of the poorest areas of the country. There are also questions over the criteria for allocating money after the former chancellor, Rishi Sunak, told an audience that he changed funding formulas to divert money from “deprived urban areas”.

Ministers want the multi-billion pound fund to provide a cash boost to some of the poorest areas of the UK, but the new figures obtained under freedom of information laws reveal that just £107.4m of funds were delivered in the year to 31 March 2022.

Jack Shaw, a researcher into local government who obtained the new figures, said: “With less than 3% of the levelling up fund having been spent in its first year, the rhetoric of levelling up hasn’t matched the reality.

“The government needs to be clear about why that is the case and why [the north-east] despite the focus on correcting regional imbalances, has received less than 5% of the fund’s spending to date.”

Initially, it was hoped that £600m would be delivered in 2021/22 by the fund. The figure was revised downwards to £200m, but not even that target has been hit.

The new figures reveal the West Midlands received the most money in 2021/22, with projects receiving £16.3m of funds. Northern Ireland received the smallest amount, with projects receiving just over £1m of cash, equivalent to 57p per head of population.

While the north-east received less funds than the south-east in 2021/22, it did receive more per head of population: £1.83 per capita, compared to the £1 per head of population received in the south-east.

Officials say they allocated £1.7bn in the first round of funding in which the successful bidders were announced in October last year. Bids for the second round closed last month.

In the 2020 spending review, Sunak announced the launch of the levelling up fund to support towns and communities with regeneration schemes. It will run over four years from 2021/22 to 2024/25.

The methodology for allocating awards has faced criticism for not using deprivation levels to rank areas for priority funding.

Lisa Nandy, the shadow levelling up secretary, called for an inquiry into why some of the poorest communities have so far missed out in levelling up awards.

A spokesperson for the Department for Levelling Up, Housing and Communities said: “This is a selective use of figures and does not accurately represent allocations from the first round of the Levelling Up Fund, where the North and Yorkshire are receiving £519m, more than the south-east and London combined.

“We are working closely with all levels of government to relentlessly drive forward our shared ambition to fuel regeneration and growth in areas which have been overlooked and undervalued for far too long.”