Levelling Up

Baroness Wilcox of Newport Excerpts

Thursday 18th March 2021 Lords Chamber

[Baroness Wilcox of Newport (Lab) [V]]

My Lords, I draw attention to my entry in the register of interests as a vice-president of the Local Government Association.

The levelling-up fund is a UK-wide £4.8 billion fund announced at the spending review, with a view to investing in local infrastructure that has a visible impact on people and their communities. It should drive regeneration in places in need: those facing particular challenges, and areas that have received less government investment in recent years. Some £600 million will be available this year for projects that have the support of their local community, and up to £4.8 billion will be available by May 2024.

All local authorities across Britain can bid for the fund, but they were placed in three categories of need, with the first more likely to get funding, including help to construct their bids. Areas were selected through a deeply flawed methodology that ignores most measures of deprivation, including the Government’s own index of multiple deprivation, which takes into account income, levels of crime and health, and instead favours areas with low productivity and where people have long commutes to work—typical characteristics of rural areas.

Covid-19 has had a catastrophic effect on the finances of local government. The LGA estimates that because of the pandemic up to a further £2.6 billion of support will be needed to cover the cost pressures and non-tax income losses of 2020-21 in full. The Government’s long-term neglect of the UK’s high streets and local businesses, with footfall down 10% since 2012, had left around one in 10 high street shops standing empty even before the coronavirus hit. Councils in England have seen their core funding from central government reduce by £15 billion in the last decade, and 773 libraries, 750 youth centres, 1,300 children’s centres and 835 public toilets in England have closed.

Not a single one of the 200,000 starter homes that the Conservatives promised in 2015 has been built, despite nearly £200 million being spent. The Government have now been forced to concede that they will not keep their promise to deliver nationwide gigabit broadband rollout by 2025, and now look highly likely to miss even their reduced target of 85% coverage. Unlike the Welsh Government’s highly successful 21st-century schools building programme, the UK Government have refurbished less than half of the schools that they had promised by this year; the programme has been delayed by four years and is running £300 million over budget.

A list of local authority areas grouped and prioritised according to economic need has been published, but with no real detail as to how that was calculated. In November the House of Commons Public Accounts Committee published its report into the towns fund, announced by MHCLG in the summer of 2019, and which invited 101 English towns—out of 541 assessed—to apply for money from the fund. The committee found that the process by which towns were selected was “not impartial” and that the department

“has a weak and unconvincing justification for not publishing any information on the process it followed.”

The Government’s treatment of the levelling-up fund is symbolic of their divide-and-rule approach: Richmondshire is in the top level, while Sheffield and Barnsley, both of which have notably higher deprivation levels, are in tier 2. The funding metric must be published. The list as it currently appears is proof that this Government’s actions are levelling areas down, pushing regions and nations and some of the poorest places in the UK to the back of the queue for investment. It appears to be about this Government using the money to level up the Conservative Party’s electoral prospects rather than the economic realities of left-behind communities. I call again on the Government to publish the methodology behind the allocation and then revise how Whitehall makes these spending decisions.

Out of 45 areas allocated money from a pre-existing £3.6 billion towns fund by the Chancellor, 40 have Conservative MPs, and five of them are Cabinet Ministers. Can the Minister explain why the Government’s bizarre formula for determining priority areas appears to use car-journey distance over levels of poverty? The Chancellor has said that the metric was based on an index of economic need that is transparently published, but the fund’s official prospectus says that the information is coming “shortly”. Again I ask: when will this metric be published? Last year the National Audit Office said that the choices in 2019 of which towns could access the towns fund were based on “sweeping assumptions” and may have been politically motivated, as a number were marginal constituencies.

The actual amount of money being distributed by the levelling-up fund is just a drop in the ocean compared with what the Conservatives have taken away from the public realm over the last 10 years. I am afraid it looks weighted towards the interests of the Conservative Party rather than the interests of the British people, who have suffered over a decade of austerity. The past year has shown us how woefully unprepared public services in the UK were to deal with the onslaught of the pandemic. If you keep taking and not putting back, eventually the edifice will crumble. This time last year, when Covid hit us with such force, it found a weakened UK in every corner of its public services.

So what would Labour do in order to bring about fairness in distributing public funding? We support funding for every region and nation, but it is crucial that it is done transparently, fairly and with a say for local communities. This fund fails on all those counts. All regions and nations should get their fair share of investment. This fund pits regions and nations against each other for crucial funding, and hands money to wealthy areas held by Cabinet Ministers ahead of those in greater need. We need to be pushing power down to spread prosperity, but the fund puts control in the hands of Ministers in Whitehall instead of local communities.

This piecemeal funding does not make up for failure over the past decade, which has seen services decimated as £15 billion of cuts have been made to local government. Under the fund our regions will be getting less than they did before the crisis and, unlike before, they will have to fight against each other for every penny of investment. We should have transparent funding metrics in place and leave every part of this country a good place to grow up and grow old in.

The Government’s failure to invest for the past decade has meant that the UK has had the worst crisis of any major economy. The Government now need to secure our jobs, support our high streets and strengthen our communities through investment that truly delivers the aspirations of people in every region. If the Government care about levelling up, why have they not come forward with a plan to fix social care, which in some areas of the country is close to collapse?

Does the Chancellor’s approach to prioritising funding for the levelling-up fund not show that, if you vote Conservative, your money will go to wealthy areas? How can this Government claim to fix regional imbalances when the fund pits regions and nations against each other? What assessment have they made of reports that Cornwall Council will take the Government to court over the decision not to prioritise its area? Does the Minister expect further court cases?

What about the positions in the nations? The fund bypasses the devolution settlement by directly allocating funding for regional and local development in Wales, directly counter to the expressed position of the Senedd and directly contrary to what was announced at the 25 November spending review, when the Chancellor said the £4 billion commitment in England

“will attract up to £0.8 billion”

in funding

“for Scotland, Wales and Northern Ireland in the usual way.”

This is the UK Government taking funding that would previously have been allocated to Wales to spend in line with the priorities that the Senedd—elected by the people of Wales—has identified. Decisions are to be made by Whitehall departments with no history of delivering projects in Wales, no record of working with communities in Wales and no understanding of the priorities of those communities. In practice, this means that the UK Government will be taking decisions on devolved matters in Wales without being answerable to the Senedd.

The Governments in Wales, Scotland and Northern Ireland now face the prospect of a centralised, Whitehall-led approach instead of a regional and nation-focused approach. The UK Government are going out of their way to take money away from the nations and pick a needless constitutional battle to weaken devolved powers in the middle of a global pandemic. Their fixation with undermining democratic devolution is driving a cynical attempt at rebranding existing spending as new and rolling back progress on a model of national and regional development by democratically elected Governments and councils across the United Kingdom. They are indeed levelling down.

[Baroness Pinnock (LD) [V]]

My Lords, I draw the attention of the House to my relevant interests as a vice-president of the Local Government Association and a member of Kirklees Council. I read the Statement on levelling up with great interest. My own area of West Yorkshire includes towns and cities that, by any fair measure, will qualify for focused help to support their residents. I am therefore particularly keen to understand what it is all about.

“Levelling up” is a rather nebulous phrase. I want to understand precisely what it means and, more importantly, what is hoped to be achieved by it. Perhaps the Minister can help, as I have not been able to find anywhere either a definition or an explanation of how improvements will be measured. Can the Minister please provide a definition of levelling up and the metrics that will be used to determine whether the funding allocated has been a success? I appreciate that sharing metrics data orally is not easy, so will the Minister provide that information and make it available to all colleagues through the House of Lords Library?

The tools that the Government are proposing and which are outlined in this Statement are resonant of previous attempts to improve the lives of parts of our country that do not enjoy the same level of well-being as the more affluent one. Previous Governments have used similar funding packages. There was City Challenge, the Single Regeneration Budget and then SRB2. This was followed by investments through the regional development agencies. The common feature was infra-structure investment, although some aspects of SRB had elements of support for jobs and skills. Will the Minister provide the data that demonstrates that the areas that benefited from the funding packages I just listed have prospered as a result—or, better still, data that explains the reasons why some of the same places are still suffering from multiple deprivations? I can name them if the Minister is not sure which places they are. I ask these questions because the Government are in danger of repeating some of the less successful aspects of past attempts at regeneration. They need to explain whether providing shiny new roads and revamped town centres is the way to improve lives and level up.

The Covid pandemic has shone a bright light on the areas of our country that suffer from considerable deprivation. There is a strong link between deaths from Covid and living in deprived parts of our country. Can the Minister explain why some of these areas will not benefit from any of the funding packages outlined in the Statement? Are these places just going to be ignored? What plans do the Government have for providing support for them? Does the Minister agree that reviving local government by enabling local authorities to provide self-help may well be the best way forward? Of course, that depends on adequately funding local government and devolving to councils the right to bring in local knowledge and talent to take responsibility for making the towns that they represent proud places once again. Does the Minister agree?

What we do know is that people who live in areas of multiple deprivation have lives that are literally limited. They die younger; they live in poor-quality housing; their access to healthcare, training and well-paid jobs is limited. Does the Minister, with his wealth of local government experience, agree with this? If he does, can he also explain the reason for these measures not being the main ones used to determine which places will benefit from the funding packages outlined in the Statement?

This brings me to the selection of the places that are due to benefit from those funding packages. Of course, metrics can be carefully selected to ensure that the towns that the Government wish to benefit from additional funding come out top of the pile. That is clearly what has happened in these instances. Using the metric of distance to travel to work will target those places that are of a more rural nature. If that is the aim, the Government should be honest about it and focus on improving public transport in rural areas. If the heart of so-called levelling up is providing focused support to places suffering from multiple deprivations, the Government should use the metrics that enable that to happen. If they do not, they are being hypocritical and make those of us looking on regard what they are doing with some cynicism.

Much of the content of this Statement is of packages that are being announced as new yet again. The miserable levels of funding to mayoral combined authorities of £30 million or so a year in areas that serve, say, 2 million people, is just another example of re-announcing old packages of funding. The support for the well-to-do areas that can raise £250,000 as matched funding to buy and run a community asset has been re-announced. These packages are not new and not aimed at poorer parts of our country.

I want those post-industrial towns that have experienced considerable decline—economically and socially—to benefit from long-term and sustained support that will revive their communities, improve the health and well-being of their residents, enable training and skills that lead to well-paid jobs, and bring hope for the future. Unfortunately, the package of funding announced does none of that. I look forward to answers to my questions when the Minister replies.