Levelling-up Fund Round 2: Bidding Process
(1 year, 10 months ago)
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Sir Christopher Chope (in the Chair)
I said the sitting was suspended until 5.7 pm because we did not have the Minister with us. We now have the Minister and all the players in the next debate. I propose that we start now and allow it to continue until 6.7 pm, because that allows for the injury time left over from the previous debate.
Anne McLaughlin (Glasgow North East) (SNP)
I beg to move,
That this House has considered the Levelling Up Fund round 2 bidding process.
It is a pleasure to serve under your chairmanship, Sir Christopher. Round two of levelling up: what on earth was that all about? [Laughter.] Is that an intervention already?
It seems like a lifetime ago that Boris Johnson stood on the steps of 10 Downing Street promising that he was going to level up the UK with money to areas that had been left behind, ravaged by successive Tory Governments—those might not have been his exact words—and bearing the brunt of each and every austerity measure, where the poor pay for the excesses of the rich, as per usual. Two Prime Ministers later and we have just had the announcement of the second phase of the levelling-up fund.
Glasgow submitted seven bids to the second round, many of which would have helped to redevelop some of the most deprived communities in Scotland. Officers and councillors spent months preparing the bids to give our communities the best possible chance of securing funding, and the latest estimates are that around £500,000-worth of officer time went into them. That is why I have secured this debate. It was a complete waste of effort and a complete waste of the energy, skills and knowledge that Glasgow City Council professionals and councillors alike poured into the bids. I pay tribute to them for the incredible work they did; however, as I said, it was a complete waste of their time and a shameful waste of half a million pounds that my local authority simply cannot afford.
It was waste, but not because they were not successful. I accept that if funding is going to be provided in that way—I do not agree with it and will come to that—there are no guarantees. The reason why it was a waste of time and money is that it was not possible for them to be successful as the Government changed the rules at the eleventh hour. My understanding is that Ministers intervened at the last minute to say that if a local authority had been awarded funding of any amount in the first round, no bids could be awarded funding in this round. That sudden and inexplicable shifting of the goal posts ruled all of Glasgow’s bids ineligible for funding.
Chris Stephens (Glasgow South West) (SNP)
Is my hon. Friend seriously telling the Chamber that local authorities had spent hours and months preparing a bid and that at the last minute the scorings were changed by ministerial interference because a local authority may have had funding in round one and was then automatically disqualified in round two? That is a scandal.
Anne McLaughlin
It is a scandal. That is exactly what I am saying because that is exactly what we were told and the explanation the council was given. At a time when local authorities are feeling the financial strain more than ever, it was just wrong and, frankly, cruel.
For Glasgow City Council, funded by the Scottish Government—a Government who, unlike this one, have to live within their immediate means and, unlike this one, have to provide a balanced budget—the financial flexibility simply is not there. Glasgow City Council also has other financial pressures, unique to the city, in that when the SNP was elected it finally settled the previous Labour council’s decade-long equal pay dispute with mainly female employees. That was absolutely the right thing to do and I am extremely proud of my SNP councillor colleagues for that, but it was a massive bill that Glasgow will be paying for years to come.
The council was already in an extremely tight financial position because the Scottish Government are in a tight financial position, and that position was even tighter because it is paying the price for the previous council’s 10-year battle with women workers. The council was doing the best it could with the resources it had. Let me say to everyone here that Glasgow City Council’s work is regularly replicated around the UK because it runs some inspirational programmes despite financial constraints. However, given those additional constraints, it was even more galling to see the UK Government wave the carrot of levelling-up funding in front of our noses, only to snatch it away at the last minute.
I said that I do not agree with the way the funding is awarded. Forcing councils to compete against one another is a terrible way to distribute finance that should, by rights, just be given to local authorities to address local problems. Of course, the possibility of securing much-needed investment could not be turned down, so the work was done, and the bids were submitted in good faith.
Glasgow had some fantastic bids. We know this, not because we have seen them—although we have—but because our council officers were told as much by UK civil servants. Until the night before the announcement, the discussions were about which of them were most likely to be successful. I would like the Minister to explain to us exactly what happened in the 24 hours leading up to the final decisions being made.
My own constituency’s bid was for the regeneration of Saracen, Stonyhurst and Allander Streets in Possilpark, creating an urban park and building on the excellent work of the community-led business improvement district. To me, that is the epitome of levelling up—working with communities to build economic prosperity and resilience in areas of deprivation to support and develop what these communities have already started themselves. It is about supporting their empowerment. Instead, Possilpark has been discarded. The people of Possilpark deserve better.
The bid for Easterhouse, another area of Glasgow with historical and generational inequality, was for an incredible project that would have redeveloped the local shopping centre and public realm, not only linking the college and social enterprise hub but improving active travel routes and access to and the promotion of the wonderful Seven Lochs wetland park. It would have been a much-needed boost to the area, which was, statistically, the worst impacted by covid in the whole of Scotland. Again, Easterhouse and the people of Easterhouse were discarded. Again, I say that the people of Easterhouse deserve so much better.
Alun Cairns (Vale of Glamorgan) (Con)
In view of the fact that economic development is generally a devolved function, why do the Scottish Government not fund such an important project?
Anne McLaughlin
Can I have a little longer to explain this to the right hon. Gentleman? The Scottish Government have a fixed budget. It is fixed by his Government. They decide how much they can spend. As I said earlier, they have to live within their immediate means. If we look at Possilpark, money has been—[Interruption.] The right hon. Gentleman does not seem to be listening to my answer, so why ask the question in the first place? Money does go in from the Scottish Government. If he is suggesting that Scotland is not eligible for this levelling-up funding, that is a different question. Maybe the Minister will confirm that we are eligible for it, because it is our taxpayers’ money as well.
Alun Cairns
I congratulate the hon. Lady on securing this important debate and I hope to have the opportunity to make the case for my constituency a bit later. To respond to her specific points, does the Scottish Government not have tax-varying powers? This is quite obviously an exciting project but, by the sound of what the hon. Lady is saying, it is not sufficiently important for the Scottish Government to fund it in Glasgow.
Anne McLaughlin
That is utter nonsense. I am not going to repeat what the right hon. Gentleman just said. Lots of funding is going into both areas. That is our taxpayers’ money as well. Why should the Scottish Government increase taxes—they cannot do it in year—when we have already sent the taxes down here? We are supposed to get some of them back; we are supposed to get more of them back than we have been. Incidentally—this is turning into a response to the right hon. Gentleman, although I am not sure he is listening—the people of Scotland voted overwhelmingly to stay in Europe. If we had stayed in Europe, almost double what was available in the levelling-up fund would be available to the whole of the UK. I think he needs to think about what he is saying; I think he is well aware of what he is saying and the implications.
Then we look at who got the funding. While my constituency and other Glasgow constituencies got nothing, the Prime Minister’s wealthy constituency was awarded £19 million. It simply exposes the lie of levelling up for what it is—just another way for the Conservatives to funnel public money to their own pet projects. The idea of spreading the funding evenly around the UK is somehow a fair way to do it is total nonsense. To properly address inequality and deprivation, we have to do more than just throw a few pounds at communities every once in a while. We need to pump money and support into the places that need it, and we need to do it again and again. That takes a level of courage and conviction that the Westminster Government simply are not showing.
That got me thinking that perhaps we are not all on the same page and that the Government have no desire to address underlying inequality and deprivation. I wondered why, and I can only conclude that the UK Government blame the people and communities living with serious levels of deprivation for that deprivation. Do the Government have an ideological belief that it is somehow the fault of the people in those communities, and that they should just leave them to it? I do not know what other conclusion can be reached.
Let me be clear where we in the SNP stand: the systemic problems at the heart of too many of our communities, including Possilpark and Easterhouse, stem from the contraction of people’s incomes and the erosion of the social safety net after 13 years of Tory austerity. The Tory Government are to blame, not the people themselves.
The leader of Glasgow City Council, Susan Aitken, wrote to the Secretary of State for Levelling Up, Housing and Communities to set out just how bad a deal it has been for Glasgow as a whole. She pointed out that only 3.7% of the funding allocated to Scotland was received by Glasgow, but that if that had been based on population size, it should have been three times as much. Councillor Aitken goes on to say that, had the allocation been based on the proportion of people living in deprivation, it would have been an eye-watering 15 times as much. That was the criterion for EU funding, which the levelling-up fund was supposed to replace when we were dragged out of Europe against our will—as I said.
I will end by asking four questions. The Minister should bear in mind that the officers and councillors of Glasgow City Council, Glasgow MPs and MSPs and, most importantly, the people of Glasgow are all waiting for the answers. First, why were we and others told to submit bids and then told that we were not eligible, because we had had a small amount of funding in round 1? Secondly, what is the thinking that says divvy it up equally, despite the fact that people and communities do not live equal lives? Thirdly, will there be a round 3 and, if so, how can we be sure that there is a point to committing the time and money it will take to bid for it? Finally, will the UK Government reimburse Glasgow City Council the estimated £500,000 cost of submitting bids that it could not possibly win, or are the people of Glasgow expected to pay for that themselves?
Giles Watling (Clacton) (Con)
It is an honour to serve under your chairmanship, Sir Christopher. I am grateful to the hon. Member for Glasgow North East (Anne McLaughlin) for securing the debate.
I support the general notion of levelling up and am pleased that Clacton has won its most recent bid. It is set to receive £20 million, and my hon. Friend the Minister is well aware of how grateful I am. However, it has to be said that it is richly deserved, given the years of headlines we have seen about the decline of coastal towns. In short, we are too often overlooked. Furthermore, in my constituency is the most deprived ward anywhere in the UK—not a thing to be proud of, and something that must be addressed.
That levelling-up money very much chimes with my long-standing push in this place that it is unfair for the east of England to be treated in an homogeneous way. Yes, the home counties are rich, but not all their constituent parts are. Clacton has some areas of deprivation that easily exceed those anywhere else in the nation. We need to sort that out, so there is much further work to do and further bids that need winning.
From an infrastructure point of view, the district of Tendring is divided physically. My hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) and I—in Clacton—share the peninsular on which Tendring sits, but regular travel from his constituency to mine is difficult, to say the least. All roads lead to Colchester and not across the area. We have a new freeport coming at Harwich, with all its accompanying benefits, which is great news, but we need access from Clacton urgently. They need us and we need them.
The Essex County Council transport bid for levelling-up funding failed, as did the Tendring District Council high street funding bid. Improving Clacton town centre with the £20 million is a fantastic start, and we are grateful, but there is so much further to go. Transport infrastructure for Tendring has to be the long-term strategic goal.
If we see continued coastal decline in places such as Clacton, which is in one of our new, shiny freeport areas, the whole freeport agenda might well be seen as a busted flush. I am very happy to invite my hon. Friend the Minister to Clacton to see how poorly connected my town is to one of our new and much-anticipated economic engines. I would be happy to drive her around and show her exactly how the land lies. Further funding here will mean the difference between hitherto unimagined regeneration and an historic flop.
Finally, while this is not a Department for Transport debate, may I quietly mention the work at the Haughley and Ely railway junctions? The Department for Transport will likely be scouting around for significant savings, and as chairman of the great eastern main line taskforce, I am unaware of a project in the nation that would deliver so much for such relatively little. I would urge my hon. Friend the Minister to talk to colleagues in the Department for Transport about how levelling-up bids could bolster capital plans that are now stuck in the mud in my area.
Several hon. Members rose—
Sir Christopher Chope (in the Chair)
Before I call Mike Amesbury, let me say that we have six hon. Members seeking to participate in this debate, and we have half an hour before the wind-ups, which will start at quarter to 6. I will not impose a time limit, but I hope Members will bear that in mind.
Mike Amesbury (Weaver Vale) (Lab)
It is a pleasure to serve under your chairmanship, Sir Christopher. I want to congratulate the hon. Member for Glasgow North East (Anne McLaughlin) on securing such a timely debate. Many communities in great need have lost out in both rounds of levelling-up funding. I note that the hon. Member for Clacton (Giles Watling) has been successful and I congratulate him and his community on that.
The Government expect places that receive funding to be grateful for a partial refund on money that has been systematically stripped out of their communities, decimating local services, whether that is children’s services for the most disadvantaged or adult services and social care, not to mention grounds and environmental maintenance. Those are just some of the key services that councils provide.
Nearly £500 million has been cut from Cheshire West and Chester Council’s budget over the last 13 years, while hard-pressed residents are expected to pick up the bill through astronomical council tax rises—in modern terminology this is known as core spending power. The Government have failed on levelling up, and they have even given up the pretence of trying. Look at Richmond and the award there, then look at Knowsley. That is a prime example of that.
At the core of this failure is the fundamentally flawed system and an unfair “Hunger Games” bidding process, which I know my hon. Friend the Member for Nottingham North (Alex Norris), our Front-Bench spokesman, will refer to. Many local authorities have had to go through this process. The Local Government Association—in which I should declare an interest as a vice-president—has estimated that each bid costs an average of £30,000, successful or not.
The system is not measured according to need, as it should be, but is seemingly influenced by political patronage at times. In my constituency, a very good and comprehensive bid was put forward by Cheshire West and Chester Council for funding for a new Winnington bridge travel corridor and brownfield development of 1,500 houses. The bridge is a key piece of infrastructure that serves industry, businesses and local people in not just my constituency but neighbouring Tatton. The council simply does not have the money to fund such an infrastructure project, and there does not seem to be any other Department for Transport scheme that would do the job. If levelling up were to mean anything, surely that bid would have been successful. The Government talk about “brownbelt first”, but 1,500 houses that would be good to go if the infrastructure was in place have now essentially been rejected.
If we truly want to power up communities, decisions need to be made closer to the communities that they would serve, and more powers need to be given to councils on funding. Devolve that funding to councils. Even the likes of Andy Street, from the Government’s side, has labelled this system of levelling up as a “broken begging bowl culture”. I wholeheartedly agree.
Today, the Conservative Government are once again busy with their own internal chaos; delivering for people and for communities is beyond their radar. I know that variety is the spice of life and we all love a bit of a surprise, but my God, this is on an industrial scale! I did not even know what Minister would turn up today. I am pleased that the Minister is here, by the way, and I will have a number of questions to ask her. But in the meantime, the whole House is seemingly in chaos and it leaves the country adrift. I think we are on our 12th Housing Minister, for example, at the moment.
Before I conclude, I have a number of short questions for the Minister. When will I and Cheshire West and Chester have feedback about the round 2 bid? Where did it go wrong? I am confused about that. What alternative route is available not only to fund the bridge, but to open up the opportunity to build the 1,500 houses? The funding is there for that, by the way; it is not a call on Government. But it is not for the bridge. What are the timescales for round 3? Will the Minister meet me to explore alternative funding routes?
I will conclude by saying that if we are truly to take control, we genuinely need fiscal devolution to our councils. That is exactly what is needed, so that they can make the spending decisions. And you know what? Sometimes they will make mistakes as well, but I would rather that that happened in our communities than came from Westminster and Whitehall. This is a flawed system.
Kevin Foster (Torbay) (Con)
It is a pleasure to serve under your chairmanship, Sir Christopher, and I congratulate the hon. Member for Glasgow North East (Anne McLaughlin) on securing the debate.
Over recent years, Torbay has succeeded in many bids, with a significant level of investment provided by the Government since 2015. That includes the Paignton future high streets fund, where we got £13.4 million, and the Torquay town deal, worth £21.9 million. Prior to 2015, it was normally news when Torbay made the list for a funding announcement, as we were often overlooked; now, it is news when we do not. That shows the turnaround in how our bay is regarded, but it does not dampen the sense of disappointment that, for the second time, our bids to the levelling-up fund have failed, despite Torbay being one of the areas where demographics would suggest that levelling up would be aimed.
For background, two bids were submitted in relation to Torbay. The first was the “Fish and Chips” bid, as it was termed, looking to support the expansion of Brixham fish market, which last year saw record sales of more than £60 million, and our cutting-edge photonics sector. The fishing element alone could have allowed for an additional £20 million of catch to be processed through the market each year, creating a forecast 160 new year-round jobs and putting more than £38.5 million into the local economy. The second bid, submitted in partnership with our neighbours in Devon, was for the south Devon cycleway, which would have provided a safe travel network on the most used commuter routes through Teignbridge and Torbay, as well as providing travel choices to Newton Abbot rail station and the upcoming Edginswell rail station. Both those bids failed, the fish market project for the second time.
I accept that there are some questions that we need to consider locally about our approach for the 3rd round, so it would be helpful for the feedback on those bids to be as clear as possible. Is the fish market project one that the Government would fund under levelling up? If not, then, no matter what my thoughts may be on it personally, we can at least reconsider our approach and not waste effort on a third bid. I would also be interested to hear what impact the failure to deliver other Government-funded projects by the coalition of Lib Dems and Independents running Torbay Council may have had on the success or otherwise of our bids. An example is the land release fund, where, after about four years, the £3 million offered has not actually seen a house built. Then we come on to the various delays in their getting major projects under the town deal and Paignton future high streets fund under way. I appreciate that demanding funding on the one hand and then not spending it on the other is hardly a persuasive approach, so it would be helpful to know what impact that had on our success or otherwise in relation to the bids and what considerations there will be, going forward.
It is welcome to see the Minister in her place, and it will be interesting to hear her thoughts on a couple of specific points. First, the obvious query is how candid the feedback will be on our bids? Will it be clear whether a bid is simply not what the Government are looking for under levelling-up funding, and will they then be firm in suggesting that we look at something else? Secondly, what is the impact of the delivery, or not, of other Government-funded capital projects by local authorities on levelling-up funding bids? I accept that the feedback may be good and bad.
The debate has been a welcome opportunity to set out my thoughts on the recent bidding process and its results in Torbay. There is no shying away from the fact that Torbay has challenges, but it also has great potential. The levelling-up agenda should be about unlocking that potential, and that is why my hon. Friend the Member for Totnes (Anthony Mangnall) and I are so keen that Torbay is successful in the next round of bids for levelling-up funding and that the feedback is as clear as possible so that we can put up a bid that does our bay justice.
Jon Trickett (Hemsworth) (Lab)
Thank you for your guidance, Sir Christopher, and for your generosity in giving us an extra seven minutes. I am grateful to the hon. Member for Glasgow North East (Anne McLaughlin) for initiating this important debate.
I object to the whole process: the Government created the divisions in our society that the levelling-up programme is meant to repair. Those divisions are so deep, and the cuts so vast, particularly in more deprived areas, that the proposed programme is simply a competition among areas of deprivation for crumbs off the Government’s table. It is not acceptable that the Government have set out the programme as they have. If they really want to deal with levelling up—clearly, they do not—they need to change the entire market-led, “Government stand back” approach and make serious interventions.
I represent a community that is among the most deprived—if we are not careful, we will be into a “Four Yorkshiremen” sketch, as we share details of deprivation. We do not want to get into that, and it is not right that that is how the Government have structured the competition for funding. The average weekly wage in my area is £495; in London it is £728—each worker on average pay earns £12,0000 a year more in London. In terms of NVQ level 4, we are at 22%, whereas in the Prime Minister’s constituency it is twice as many people. In terms of professional and managerial jobs, we have half as many as in London, and since 2010, weekly earnings have increased by only 6% in my area, as opposed to 22% in London. Areas such as mine have been devastated by successive Tory Governments, starting with the closure of the collieries without a proper industrial strategy. So by any criteria those areas should be gaining access to additional funding if the Government are serious about dealing with deprivation.
Notwithstanding my objections, we put together a bid for South Kirkby, one of the poorest areas of my constituency. It was put together with a private sector firm that is quite the most remarkable company I have seen. It was built from nothing. Adrian and Lee are behind it, and they realised that there is big money in the industry of rock and roll. They are producing a series of activities, and the company is unique in Europe—there are only two such companies in the world. We put a bid together with them. The average pay on the campus they have set up is more than £40,000, whereas average pay in the village is £18,000.
We all recognised that we needed to build a bridge between the deprivation in South Kirkby and the immensely successful private sector development at the top of the hill. They have raised £50 million of investment. We then put in a bid for £20 million, which would have levered in a further £30 million—that could have had a dramatic effect, and it was private-sector led. Apart from the whole process being a disgrace, I feel so annoyed because a Government Minister—of course under a previous Prime Minister, if Members can remember back to last June—told the House that we were getting our £20 million. Work had been done, and further work had been carried out not simply by the council but by other officers and by the firm I referred to—it is called Backstage Academy—on the basis of a promise made to this House. What happened, Minister?
People in our area know that I am not allowed to say that the Ministers were liars, and I would not dream of saying that, but they are saying that I should say that we were cheated of that money and the opportunities and life chances that we might have had. Those people have grown up in villages that were left devastated all that time ago with the closure of the pits.
Anne McLaughlin
Does the hon. Member agree that it is not the individual who makes the promise who is supposed to keep it, but whoever inherits that position? They are not speaking in a personal capacity; they are speaking in a ministerial capacity.
Jon Trickett
I totally agree. The Prime Minister changed and the politics of the country changed, and they suddenly saw an opportunity to dip their hands into a bag of funds that a previous Prime Minister had created and to use those for their own political purposes. It is a disgrace.
We are dealing with the poorest people in the country. Is the Minister aware that women in my constituency are now dying younger than ever before? I think the average is 66 years of healthy life. They are dying before men, which is very unusual, and that number is declining. We need something to be done as a matter of urgency. Will the Minister at least send us a courtesy letter—we have not had one—as to why we were betrayed in the way we were?
Alun Cairns (Vale of Glamorgan) (Con)
It is a privilege to serve under your chairmanship, Sir Christopher, and I congratulate the hon. Member for Glasgow North East (Anne McLaughlin) on securing this debate. I am extremely disappointed that Barry Making Waves—a proposal for a marina in Barry—was not successful. Although disappointed, I remain determined to ensure that it is successful in the next round of funding.
I will defend the policy, because when I was Secretary of State for Wales I had a part in shaping the objectives of the successor to European funding. I did that with parts of the country in mind that had been ignored for far too long, and that includes eastern parts of Wales and my constituency. The policy’s objective is right, in that it seeks to support those communities that have been left behind. The policy’s outcome may need further explanation to clarify and highlight why some communities have been successful or not.
Having investigated, spoken to colleagues and worked with my Labour-led local authority to clarify why Barry Making Waves was not successful, it is clear that officials will have scored each individual project. Clearly, my project was not successful, although other neighbouring projects were, so when it is suggested that there is a party political motive in supporting individual projects, that does not stack up credibly.
Alun Cairns
I will give way in a moment.
That does not stack up credibly, because my seat, and others I can point to, would have been successful on those grounds, and that would also give rise to a judicial review. So it is obvious that these applications would have been scored according to the policy’s objectives, and officials would have dealt with them individually, rather than according to the party political motive that has been suggested.
The question I will pursue in my contribution is how we can learn the lessons from not having been successful in this round—like the schemes that were unsuccessful in round 1 but successful in round 2. My authority did not bid in round 1 and was unsuccessful in round 2, but it certainly plans to submit an amended scheme in round 3. I want to develop this argument a little further, but I will give way to the hon. Member for Glasgow North East (Anne McLaughlin) , as she was very kind and generous in giving way to me.
Anne McLaughlin
With all that the right hon. Gentleman has just said, how does he explain the fact that Glasgow City Council officers were told that their bids were good and were scoring well, that they should expect to get some of them and that it was just a question of how many, but then, at the last minute, Ministers intervened—if this is not party political, I don’t know what it is—and said they were changing the goalposts? Anybody who got funding in round 1—we had had funding for one project—was no longer eligible, which wasted £500,000 of officer time. If that is not political intervention, how does the right hon. Gentleman explain it?
Alun Cairns
I will wait for the Minister to respond on that, but if the hon. Lady’s local authority had sufficient grounds to suggest party political interference, a judicial review would clearly find in its favour, and the Minister would have to explain the issue. The alternative is that the hon. Lady is seeking to make party political points but is not prepared to follow them through. I am just as disappointed as she is, but I am determined to learn the lessons in order to ensure that my project—amended and strengthened—succeeds in the next round, in the same way that those that failed in round 1 succeeded in round 2.
In reality, projects in Labour-run Cardiff—in Cardiff South and Penarth and in Cardiff Bay—received £50 million from the scheme, in addition to the £2.5 billion that has been spent in recent years. I want to understand why those projects qualified and not the project in Barry—a community that has been left behind for many years by the Welsh Labour Government—when the policy’s whole purpose and motive is to ensure that communities that have been left behind by various Governments can be successful. Similarly, in the neighbouring authority of Bridgend, a project to rebuild the Grand Pavilion will play a part in attracting further visitors to the area. However, that project does not have the same economic strength as the marina in Barry, which would have attracted at least £50 million of private development.
Will the Minister make officials available to go through the bids line by line, detail by detail, so that we can learn from why we have not been successful—I say that in the most positive way—and why other communities have been? On the face of it, they did not appear to have such strong applications, given what they will have received under wasted European-aided projects in recent years.
Since 1999, Wales has received close to £5 billion in European aid investment. Despite that, under the leadership and stewardship of the Welsh Government, to whom economic development is entirely devolved, Wales’s relative gross value added has fallen back significantly, and Wales has become the poorest part of the United Kingdom. That is why I am determined that the levelling-up fund, or the precursor to what will become the shared prosperity fund, will ensure that we have a much more business-focused, wealth-creating, economically regenerating package of projects, rather than some of the European-aided projects administered and led by the Welsh Government, which are now laughed at.
I remain disappointed, but I am absolutely determined that the Barry Making Waves project will succeed in round 3 with the Minister’s help.
Alison Thewliss (Glasgow Central) (SNP)
I thank my hon. Friend the Member for Glasgow North East (Anne McLaughlin) for securing the debate.
Back on 29 July, during a Conservative hustings in Tunbridge Wells, the now Prime Minister said:
“I managed to start changing the funding formulas to make sure areas like this are getting the funding they deserved. We inherited a bunch of formulas from Labour that shoved all the funding into deprived urban areas and that needed to be undone. I started the work of undoing that.”
What a cracking job he appears to have done.
I stand here extremely disappointed that the two bids from my constituency were not successful—although I am not here to be part of a greetin meeting—because the odds were stacked against us by the UK Government and the way in which they allocated the fund. They set up a competition based on pitting areas against one another instead collaborating. They chose small projects where they can go and cut a ribbon, rather than those based on strategic planning and what communities actually need—that grassroots approach that is central to successful levelling up. Indeed, if the Union is such a great success, why does it need so much levelling up? That is another question for the Government.
The first bid in my constituency that I want to talk about concerns the People’s Palace and Winter Gardens, which celebrated the 125th anniversary of its opening on 22 January. At the time of its opening, the Earl of Rosebery declared it would be
“open to the people for ever and ever.”
The Victorians were very ambitious, but they had not figured out how to maintain a glasshouse in Glasgow 125 years into the future, so part of our bid was around the significance of the People’s Palace to the city of Glasgow. It is part of the history and heritage of our city and is tied into further heritage efforts, leading down from Glasgow’s historic cathedral, along the High Street and the Saltmarket to Glasgow Green, a place where people would gather to protest, as they still do today.
That bid, however, was not successful, and I seek an explanation from the Government as to why they value Glasgow’s heritage and future so little. The People’s Palace is special: it is a place where people can gather for music and community events, and my constituents had memorial benches in the glasshouse at the rear, but they cannot now go and sit on them to remember their loved ones. I want the People’s Palace to have a future—125 years into the future, at least.
However, as my hon. Friend the Member for Glasgow North East set out, without the money from this bid, Glasgow City Council does not have the necessary funds. The Scottish Government are tight for funds as well. This money was supposed to be additional; it was supposed to replace European money that we have lost out on. According to analysis by the Scottish Government, we are getting 60% less money from these funds than we would have done from European funding. It is just not fair. Everything has been stacked against us from the start. There is less money for these projects than we would have got were we still members of the European Union. That is the Brexit dividend that Glasgow is facing.
The other project was for transport, which, again, the city of Glasgow is entitled to bid for. In the late 1960s, the city fathers decided to drive a motorway through the city centre, demolishing things. At the time of its opening, protesters stood with banners saying, “This scar will never heal.” Glasgow’s transport bid sought to heal that scar from the late 1960s by greening the city centre and ensuring that there were accessible, green, active travel routes through the city—part of the legacy of COP26 in Glasgow.
Again, I cannot understand why the Government think that project is not worthy of support. It would knit the city centre back together. It would be such a change from the road projects of times past to have a more people-centred project for our city. We had no explanation as to why that was rejected. As my hon. Friend the Member for Glasgow North East said, we were told, as was Glasgow City Council, that these bids had a very good chance of being accepted. Then, we found that the rules had been changed late in the day and that money had been spent by the council on these projects that we will never get back. That is £500,000 that the council could ill afford to lose, but it gambled on this project because it thought it was worth doing.
The other project I would like to mention is not in my constituency, so I will be very quick. I am the chair of Clyde Gateway—I draw Members’ attention to my entry in the Register of Members’ Financial Interests—which is a project to tackle the post-industrial legacy of that part of Scotland by dealing with historic chromium contamination in Shawfield. It had the full support of the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier). I can think of few better projects than one that would remove contamination from the ground, allowing for development to go ahead and new jobs to be created in the east end of Glasgow and into South Lanarkshire.
The Minister has many questions she needs to answer, but why does she think that none of those projects is worthy of support?
Rachael Maskell (York Central) (Lab/Co-op)
I am not here to defend the bid from City of York Council—the Lib Dem-Green council could have put its focus on real levelling-up projects—although I would be interested to hear the Minister’s justification as to why it did not receive funding. We have other projects into which we could put that money to really level up York, but I am here to critique the process itself. It is evident to all that this is about justifying funnelling funds into pet projects in particular seats and granting a few other funding bids to justify that.
I want to focus on how we can really level up. I follow the work of Professor Philip McCann, the chair of urban and regional economics at Alliance Manchester Business School, and it would be worth while for the Minister to read some of his work. He talks about economic growth and how it can be achieved—not through pet projects and a piecemeal approach, but by ensuring that we have a strategy to drive forward economies and to see the regeneration that places like York desperately need. Indeed, that is happening elsewhere in Europe—take Germany, where that regional focus is well understood.
I draw the Minister’s attention to evidence given to the Levelling-Up and Regeneration Bill Committee by Professor Dame Ottoline Leyser of UKRI, who stressed the importance of growing the cluster economy, as did Andy Street and Tracy Brabin. These people are leading their regional economies, and recognise how to bring about advantages for it—how to bring together partnerships between universities, businesses, wider stakeholders, and communities. Focusing on pet projects does not achieve that. It may achieve a photo on an election leaflet, but will not make the economic switch that is so desperately needed in many communities like mine. Gordon Brown’s recent paper on constitutional reform set out that we need to move not only resourcing but decision making into local communities, so that we can spring forward with an economy that will work for everyone.
We have a rail cluster in York, with 5,500 highly skilled jobs. We have the York Institute for Safe Autonomy, and investment in leading companies is coming into our city. Why the Government are dithering over another project, the headquarters of Great British Railways, is beyond me. Those headquarters would show the country how we could grow an economic cluster. We could use levelling-up money strategically to grow it further, creating high-quality jobs for my constituents, and jobs across the region.
I point the Minister to the BioYorkshire project, which is creating 3,000 green collar jobs. That will be a green new deal for Yorkshire. There will be regional hubs in rural and coastal areas. It will make such a difference, not only for my city but for the whole region. It is levelling up that starts at the core and then builds out. That, academics say, is exactly how to build an economy for the future, how to spend taxpayers’ money wisely, and how to ensure that growth builds momentum; it is not a matter of having piecemeal projects. That is the kind of strategic approach that a Labour Government would bring in, because we understand how important it is to invest in the future and to grow out our economy. In my city, we are building the biosciences and focusing on rail, which are economies for the future, as well as creating clusters around culture and heritage. We see levelling up as an opportunity for the future, but it must be done in a strategic way, not piecemeal, as this Government have done.
Chris Stephens (Glasgow South West) (SNP)
It is a pleasure to see you in the Chair, Sir Christopher. I will depart from my prepared text, because the allegations made by my hon. Friends the Members for Glasgow North East (Anne McLaughlin), and for Glasgow Central (Alison Thewliss), are so serious that they require an immediate answer from the Minister, when she responds. Local authority officials spend a great deal of time preparing bids, only to be advised at the last minute that because money had been given in a previous round, they were knocked out of the competition. I want the Minister to confirm that was the case. If it was, it is scandalous, and there are grounds for looking at the process legally, as was said. It is astonishing that local authorities have been put in this position. If local authorities were told at the start that a bid was ineligible if the authority received funding in round 1, they would not bother applying for round 2. Or was this a last-minute decision?
Chris Stephens
I am conscious of time; I apologise to the right hon. Gentleman. [Interruption.] He has had more than one bite at the cherry.
This is so serious. Local authorities would not have applied in round 2 if they had been told that because they got something in round 1, they would not be successful. The Minister needs to tell us when local authorities were advised of that.
There are also questions about scoring. We would think that there would be scores, and that any local authority, whether successful or not, could say to the Department for Levelling Up, Housing and Communities, “Can we see our scores, please? Can you tell us where we went wrong, and why we were unsuccessful, so that if we apply in the next round, we can put that right?”. When will local authorities be told their scores? Or is it the case, as my hon. Friends allege, that local authorities were told in the week leading up to the announcement that they would be successful, and then were suddenly told that they would not be? There is something not quite right about the process; something smells here.
Can the Minister tell us how many local authorities were advised that they would get something, and then did not? I have heard that Glasgow officials were told that their bids were excellent—in fact, that they were even told, “Tell us which ones you are prioritising out of the seven.” I hope that the answer was Linthouse, but I do not know whether Glasgow officials suggested it. They were then advised that they were not getting money. That is absolutely scandalous, and it is no wonder that Members from across the House are suspicious about the whole process and the lack of transparency that seems to envelop it, given what appears to be a last-minute change by Ministers.
Knowing who made the decision is critical to this debate. Who said that if a local authority was successful in round 1, it would not get money in round 2? As a principle, that is absolutely wrong. The hon. Member for Clacton (Giles Watling) made the reasonable point that there are areas in the country that are deprived, and I do not see any reason for deciding that because money was allocated to a local authority in round 1, it should be ineligible for round 2. He made a number of points about deprived areas needing a succession of funds, and he argued that position rather well on behalf of his constituency and his local authority. There is no reason at all why a local authority should not qualify in both rounds, so something is not quite right here.
I hope the Minister will answer those questions, because people listen to statements from the current Prime Minister—we have had a number of them over the past year. His comments about taking money away from deprived areas are amplified by the allegations that have been made this afternoon. People now think that the scheme is some sort of pork barrel exercise aimed at returning as many Conservative MPs as possible in the next election. I will leave it there; I hope that the Minister will respond to my points.
Alex Norris (Nottingham North) (Lab/Co-op)
It is a pleasure to serve with you in the Chair, Sir Christopher, and to speak in this debate on behalf of the Opposition. I congratulate the hon. Member for Glasgow North East (Anne McLaughlin) on securing the debate, and on the very powerful case she made. I will cover the point about wasted time that she and other colleagues made, as well as other important points that were raised.
As usual, my hon. Friend the Member for Weaver Vale (Mike Amesbury) stole one of my important lines; the point made by the Conservative Mayor of the West Midlands, Andy Street, is the place to start:
“this episode is just another example as to why Whitehall’s bidding and begging bowl culture is broken”.
Perhaps Ministers do not want to take it from us Labour Members, but there is clearly the same feeling even within the Conservatives’ ranks. That view must be right, because over a year on from the White Paper, what have the Government got to show for this policy? There have been bodged bidding processes; millions were wasted in “Hunger Games” style bidding processes; bids have been eaten up by inflation; not a single levelling-up director has been appointed; and there have been broken promises on development funding. That is before we get to the fact that regional inequalities are widening, bus services are being lost up and down the country, train cancellations are at a record high, and people cannot get to see their GP or into hospital. Nothing works in this country.
Round 2 of the levelling-up fund would not have solved all those problems, but it would have been a great place to start steadying the ship; however, it has been a calamity. What possible system could exclude Hemsworth, for which my hon. Friend the Member for Hemsworth (Jon Trickett) made the case, but include the Prime Minister’s constituency? As the hon. Member for Glasgow Central (Alison Thewliss) said, how could that not set the Prime Minister’s words echoing around our heads—words that he meant, but that he said when he thought we were not listening? How can that not be what we take away from this process?
I agree with a lot of what the hon. Member for Clacton (Giles Watling) said about coastal communities, and hope that we get a better opportunity to discuss the issue at length. We are pleased for those communities that have been successful. Local government has lost £15 billion since 2010, so communities up and down the country are desperate for investment, but we have to be honest: set against that £15 billion loss, this round 2 gives back £2.1 billion. The Government have nicked a tenner from our wallets and expect us to be grateful for getting not even £2 back, but even those areas that have won individually are losers too. For example, it is brilliant that Norfolk County Council has secured £24 million to improve transport in King’s Lynn. We want that to happen. However, we need to take into account the money that Norfolk has lost from cuts to the local authority budget in the last four years alone—back to the time of the Prime Minister who promised levelling up, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson). Even if we include that £24 million, Norfolk is £146 million worse off in real terms. With levelling up, even those who win are actually losers.
The analysis of why levelling up has failed, is failing and sadly will fail has been around for a while. Subsequent revelations about how the bids were handled only add to the insult. We now know that many local authorities that submitted bids, including mine, never stood a chance of winning, because Ministers later excluded them from selection.
So much went into those bids. We have heard about the financial impact of the internal work in local authorities. There were huge efforts there. There were also huge efforts to engage with our local communities on what they needed, and hope was built up that they might get something back. They never had a chance. It was cruel to put them through that. Any answer from the Minister today ought to start with an apology, and a commitment —as the right hon. Member for Vale of Glamorgan (Alun Cairns) and the hon. Member for Torbay (Kevin Foster) said— to real, meaningful feedback, so that we know how things might be different in the future.
It does not have to be this way. My hon. Friend the Member for York Central (Rachael Maskell) made that point very well. She and I spent a lot of time on the Levelling-Up and Regeneration Bill. What we put into that Bill will go into our future manifesto, which we will put to the country. We could scrap the beauty parades, the bidding processes, the deals, and the scoring out of sight. Instead, we could have a sustained generational transfer of power and resources out of Whitehall into our local communities, targeted at need and for impact. Without strings attached, we would get resources to those who know best: local people.
The Government have had their chance. We have seen multiple rounds of bidding. It has been over a year since the White Paper. We could ascribe any meaning, value or motivation to what they have done; I am not interested in that. What I know is that they cannot and will not do what they set out to do. It is time that they stepped aside for those who will.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Dehenna Davison)
It is a pleasure to serve under your chairmanship, Sir Christopher. I congratulate the hon. Member for Glasgow North East (Anne McLaughlin) on securing this debate. The issue matters to every single Member of the House, whether or not they are present today.
Levelling up is about how we rewire the economic geography of the whole country, and how we create growth and opportunities in areas that have been starved of both those things by successive Governments for years. That is what levelling up is all about. I found it personally offensive when the hon. Member for Glasgow North East suggested that this Government believe that those living in deprived areas are effectively there though their own choices and actions. That is absolutely not the case. I grew up in a deprived area. I lived through that and witnessed it, and I know exactly what it is about. I find it personally offensive for her to suggest that is what this Government are about, when we have put levelling up at the core of our policy and agenda.
Anne McLaughlin
I am sorry to have offended the Minister personally, but I am very surprised to hear her say that she does not recognise that this is ideological, or that people in these deprived communities are being blamed. She needs to spend more time sitting in the main Chamber and listening to the language that her colleagues use. They absolutely do blame the most vulnerable people for the situation that they are living in, and the evidence is that the Government are not doing anywhere near enough to help them. The evidence is right in front of us.
Dehenna Davison
To say it is ideological is absolute nonsense. I will not be taking further interventions on that point, because I do not think we will find agreement in the Chamber today.
The levelling-up fund is one of the centrepiece interventions that the Government have put in place to try to tackle levelling up, and to breathe new life into some of the areas that really need it. I say “one of” deliberately, because it is set against the backdrop of a whole range of other interventions, some of which I will come on to later. I know that Members across the House, in conjunction with their local councils and other local stakeholders, have put an awful lot of time and effort into submitting bids to the levelling-up fund. I express my personal thanks to every council officer who put their time and energy into it. I know it is a tough process, and I am grateful to them for that time.
It matters to me as the levelling-up Minister, and I hope it matters to the hon. Members present, that the decision-making process is a sound one that is free from political interference and undue influence. I am glad to have the opportunity to outline how the decision-making process has worked. I assure Members that even if the bid was not successful, their efforts by absolutely no means were wasted.
In the short time I have left, the obvious place to start is with the actual process itself. I know local leaders and hon. Members have seen with their own eyes the impact that the first round of levelling-up funding has had so far, with 105 bids receiving £1.7 billion to drive regeneration and growth in overlooked areas. That impact is the reason we received such an overwhelming response to the second round, with over 500 bids received, totalling almost £9 billion. To put that into perspective, that compares with about 300 bids received in the first round.
Given the large discrepancy between the value of bids received and the amount available to allocate, sadly we were never going to be able to fund projects in every area. That being said, the fund has a clear and transparent process for determining how bids are selected. Each bid is assessed by Government officials, both in my Department and in the Department for Transport, against published assessment criteria, with the highest-scoring bids being shortlisted.
To ensure that there is a fair spread of bids across the UK, funding decisions were made by Ministers based on the assessment score and by applying wider considerations, such as geographic spread and previous investments. All of that was part of the technical notes we published along the way. The relative need of a place is also baked into the process. In this round, 66% of investment went to category 1 places—that figure was actually higher in round 1. The second round will be funding areas in Great Britain that have not received funding before to ensure that investment reaches as many places as possible across rounds 1 and 2.
As we did for round 1 of the fund, we published an explanatory note after the announcement with details of our assessment and the decision-making process. It was published on gov.uk, and it made crystal clear that Ministers did not add or remove bids from the funded list. For completeness, I will cover both the assessment and the decision-making processes described in the explanatory note. Each application was assessed impartially by officials against four criteria in Great Britain and three criteria in Northern Ireland. These were the economic case and if it was worth the cost; deliverability and if it could really be done and delivered; the strategic fit, how it would further levelling up in the area and if it would be in the interests of the community; and characteristics of place, or how much the place needs that type of investment—that was a consideration purely for Great Britain.
Officials then provided shortlisting advice to Ministers, who agreed the approach in line with the published guidance. More specifically, they agreed that the Great Britain and Northern Ireland shortlists should comprise bids that scored the highest overall and those that scored at least average or higher across strategic fit, value for money and deliverability, with a minimum value for money score. They also agreed cut-off scores for both shortlists. I recognise that it is an incredibly time-consuming process, and I appreciate the frustrations of Members who backed bids that were not shortlisted. Although it does not change the outcome on this occasion, full feedback will be coming, and I will try to touch on that more if I have a little time left.
During the final stage of the assessment and decision-making process, Ministers from my Department, the Department for Transport and His Majesty’s Treasury met to agree the final list of successful bidders. Again, we noted that the value of even the shortlisted bids was far in excess of the £2.1 billion available and, unfortunately, difficult decisions would therefore be needed. To achieve that, Ministers took the following sequential decisions. They took account of which local authorities had received funding in the first round, noting that that would help to maximise the geographic spread of investment across rounds 1 and 2, in line with the two wider considerations originally published in the fund’s prospectus. These were
“taking into account other investment in a local area”
and
“ensuring a fair spread of approved projects”.
Dehenna Davison
I do not have time, I am afraid. Each local authority was then capped at one successful bid in round 2—the highest scoring—noting that that would help to focus resources for delivery in a challenging economic environment. At that point, the highest-scoring projects remaining in Scotland and Wales were funded to ensure a fair spread of projects in Scotland and Wales until the minimum public commitments of 9% and 5% respectively over the first and second rounds were met. The highest-scoring projects remaining in Great Britain were funded until funding any more projects would have exhausted the funding available for Great Britain.
At that stage, there were two international territorial-level regions of Great Britain that had not received any funding in the second round, despite having bids on the shortlist. Again, prioritising the additional considerations of ensuring a fair spread of approved projects and so on, those two were brought into play, with Ministers agreeing to deselect a handful of the lowest-scoring bids across the north-west, London and Wales. Those were the regions and nations that significantly exceeded their guided allocation, taking into account historical regional investment from 2017-2022. As a result, and following a further quality assurance by officials at that stage, 101 bids were successful in Great Britain and 10 were successful in Northern Ireland. To reiterate, Ministers approved the selection of bids without adding or removing any individual bids from the funded list. The process was led by officials, aided by Ministers, to try to achieve the aims that were set out in the original prospectus to ensure a good geographic spread.
Dehenna Davison
I do not have time, I am afraid.
That brings me on to a point that we absolutely cannot lose sight of in these discussions: there will be a third round of the levelling-up fund. We will be announcing details of that incredibly soon.
Dehenna Davison
I am afraid I cannot commit to a date yet, but we are working at pace to ensure that we draw up a fund that works and is quickly deliverable to ensure that we can get spades in the ground and get some of these projects delivered.
I do not have very long, but I will try to cover off some of the other points that have been made if I can. Feedback was raised by a number of hon. and right hon. Members, including my right hon. Friend the Member for Vale of Glamorgan (Alun Cairns), the hon. Member for Glasgow South West (Chris Stephens), my hon. Friend the Member for Torbay (Kevin Foster) and the hon. Member for Glasgow North East (Anne McLaughlin). Feedback will be coming soon; we are aiming to get it out in writing initially. We want to ensure that the feedback is detailed enough to be of use, so we do not want to rush it. I have missed a lot of points, so I apologise. I will follow up a lot of those in writing, but I am very pushed for time at the moment.
Anne McLaughlin
We do not really need feedback. The Minister has just given us the feedback. The feedback is: the Minister has come in at the last minute and said, “If you have had round 1 funding, you are not getting round 2 funding.” I just want her to answer my question: is she going to cover the £500,000 that Glasgow City Council has had to pay to do this when there was absolutely zero point? Where is that money supposed to come from? I do not think it should come from the people of Glasgow.
Dehenna Davison
Capacity funding was made available to local authorities in Scotland to help draw up bids. That is relevant to the point the hon. Lady is making.
Anne McLaughlin
We did not get it.
Question put,
That this House has considered the Levelling Up Fund round 2 bidding process.
The Chair’s opinion as to the decision of the Question was challenged.
Question not decided (Standing Order No. 10(13)).