Levelling Up

Lord Greenhalgh Excerpts

Thursday 18th March 2021 Lords Chamber

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

My Lords, the Front-Bench speakers have taken most of the 20 minutes allowable, but I can confirm that the Minister has plenty of time to reply and that the Bank-Benchers will still get their 20 minutes.

[The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)]

My Lords, I point out that, in order to assess the efficacy of something like the levelling-up fund, we need to recognise the overall policy objective, which is to deal with the long-standing variation in economic performance between different areas and within areas.

The Government have set out their approach to the wider levelling-up agenda through a number of critical documents, such as the National Infrastructure Strategy, which focuses on energy, digital and transport, and the recent spending review, which announced £27 billion for those areas. There is also Build Back Better: Our Plan for Growth, published by Her Majesty’s Treasury, and the capital spending plan, which will be £100 billion— £30 billion more than in 2019-20. So, the overall package of funding around capital and infrastructure projects is at unprecedented levels.

The approach to levelling up needs to be seen as a package of measures. The levelling-up fund is more capital-focused and follows on from the £3.6 billion towns fund, while the community renewal fund—the precursor to the UK shared prosperity fund—is more revenue-focused. Alongside that, we have the increasing devolution of funding, which amounts to around £7.49 billion over 30 years for the nine currently agreed devolution deals.

The approach to the levelling-up fund has focused on making it very clear how we allocate funding. The index and the methodology used to develop it have been published. It focuses on areas that need economic recovery and growth, improved transport connectivity and regeneration. I am absolutely clear that Ministers did not see a list of specific places before agreeing the metrics; no changes to the index’s weightings or metrics were made as a result of Ministers having sight of the list of places.

We are also clear that this needs to be seen as a package of measures and that the levelling-up fund focuses on productivity, unemployment, skills and transport. Richmond scored low on productivity, which is one of the reasons why it is a category 1 area. Newark, which was also mentioned, scored “average to low” on productivity, skills and the unemployment rate. The approach we have taken has yielded those areas that are highest on the index. However, I repeat: all areas, in all categories, can apply to the fund and should be encouraged to do so.

With regard to the devolved Administrations, let me make it absolutely clear that we are seeking advice from them as part of this fund, and they will be consulted at the shortlisting stage. At least £800 million is being set aside for the devolved nations. On regions such as the north and north-west, a significant amount of funding, beyond the levelling-up fund, has been committed to the north to help level up, such as the £319.7 million from the Getting Building Fund. I point out that the UK infrastructure bank will be headquartered in Leeds and will play a key role in the levelling-up agenda.

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

We now come to the 20 minutes allocated for Back-Bench questions. I ask that questions and answers be brief so that I can call the maximum number of speakers.

[Lord Young of Cookham (Con)]

My Lords, I welcome the Government’s commitment to levelling up those parts of the country that, by general consent, have been left behind. I also welcome the very substantial sums of money that the Minister has just referred to. Further to the question of the noble Baroness, Lady Pinnock, when the Minister in another place was asked how we would know whether levelling up was achieving its objectives, he basically said that the next general election would provide the answer. Are the Government working on a measurement, or system of measurements, that would enable us to measure value for money for the levelling-up agenda in the meantime?

[Lord Greenhalgh (Con)]

I reassure my noble friend that the Government have established a series of provisional priority outcomes and metrics, which has been published as part of the spending review. Table 2H is a particular example of an outcome that will help to measure the success of the fund.

[Lord Singh of Wimbledon (CB) [V]]

My Lords, the Statement rightly recognises the disparities in wealth and earning opportunities across the country, and it contains some imaginative funding initiatives. What is missing is any quantification of existing disparities and any targets to measure the success of the levelling-up programme. One way of doing this is to state what would constitute success or failure. Does the Minister agree that the initiative will have failed if there is no visible diminution in the need for food banks or in the number of homeless on our streets?

[Lord Greenhalgh (Con)]

We can be very clear that the objective of levelling up is to deal with all the issues the noble Lord raises. The metrics are clear: for instance, the performance metric that I mentioned in my previous answer concerns the

“Economic performance of all functional economic areas relative to their trend growth rates”.

[Baroness Grender (LD)]

My Lords, in answer to Clive Betts on Tuesday, the Minister, Eddie Hughes, clearly stated that the way of measuring the success of this programme will be at a general election. Is it the intention to circulate table 2H, as previously mentioned? What is the open, accessible way that the electorate will be enabled to judge whether this programme is a success—or, indeed, not a success, as some of us suspect may well be the case?

[Lord Greenhalgh (Con)]

My Lords, I refer to my previous answer: there is a series of provisional outcomes and metrics. I just pointed to table 2H as an example of one that affects my department. Those metrics are then captured by departments in their outcome delivery plans.

[Baroness Pidding (Con) [V]]

My Lords, at the last election, people voted Conservative, some for the first time, because they believed in levelling up and our vision of spreading prosperity to areas neglected by Labour. Does my noble friend agree that, by ensuring that every part of the country can bid for, and benefit from, the levelling-up fund, we are accelerating our transformational levelling-up agenda?

[Lord Greenhalgh (Con)]

My noble friend is right that the levelling-up fund will operate right across the United Kingdom. It will invest in infrastructure and improve everyday life across the United Kingdom by regenerating town centres and high streets, upgrading local transport and investing in cultural and heritage assets.

[Lord Bird (CB)]

We know that a commonality among people who suffer poverty is, on most occasions, that they did not do very well at school. This leads to a low-wage economy, low-wage health and low social mobility and opportunity. We are talking about poverty —it is the only reason you would talk about levelling up. If are going to level up and to address poverty, then is this not the chance we have to take to excel with our schools and to put an enormous amount of investment into our children and the children of the next generation?

[Lord Greenhalgh (Con)]

My Lords, I completely agree that education is very much the engine of social mobility and addresses the points that were raised. We need to judge our levelling-up agenda against a package of measures that could also support skills development through things such as the new community renewal fund and the UK shared prosperity fund.

[Lord Farmer (Con)]

My Lords, can the Minister confirm whether the levelling-up fund will accept bids containing social infrastructure elements such as funding to transform family support into a family hubs model? Transformation typically requires revenue funding to redeploy senior staff and backfill their roles, the development of missing services et cetera, as well as capital funding to refurbish buildings. Is this fund open to both capital and revenue funding bids?

[Lord Greenhalgh (Con)]

My Lords, local government does tend to separate capital and revenue, and the UK levelling-up fund will have more of a capital focus. However, this could include community spaces important to local areas that support the family policies that my noble friend has raised.

[Lord Wallace of Saltaire (LD) [V]]

My Lords, the Minister will be aware that England is the most centralised democratic country, and that the greater the centralisation that a country has, the greater the regional inequality. Here we have competitive funding decided by Ministers in London as the answer to devolution. Can the Minister tell us what he understands by the word “devolution”? Can you have devolution without transferring real power and long-term finance to local and regional governments?

[Lord Greenhalgh (Con)]

My Lords, I fear that this is a mixing up of issues. We need to see that the levelling-up agenda is around the duty of a national Government helping to level up all areas of the United Kingdom, while devolution of funding is also occurring, as I have already mentioned.

[Lord Haselhurst (Con) [V]]

My Lords, while I warmly support the Government’s levelling-up plans, would my noble friend acknowledge that, regardless of their geographical location, perceived prosperity or supposed political affinity, too many parts of the country are still unreached by digital connectivity and superfast broadband? They would appreciate their own bit of levelling up in this increasingly important respect.

[Lord Greenhalgh (Con)]

My Lords, the Government recognise the need to deal with the wider issues around the levelling-up agenda. I have pointed to the national infrastructure strategy, which is putting some £27 billion towards issues such as the zero-carbon agenda, transport infrastructure and, importantly, digital connectivity and infrastructure.

[Lord Taylor of Goss Moor (LD) [V]]

My Lords, Cornwall is in complete shock. Until last year, we were regarded as one of the poorest places in the whole country, with incomes 25% below the national average and 17 areas in the bottom 10% of the index of multiple deprivation. Miraculously, in the new index, we appear to be as rich as Bath, which is in the top 25% in the UK. Can the Minister explain how this algorithm can possibly be correct, or is this not actually, quite clearly, an error as poor as the algorithms used for last year’s exams?

[Lord Greenhalgh (Con)]

I have attempted to explain several times that, as opposed to the index of multiple deprivation, the metrics of the levelling-up fund focus on productivity, unemployment, skills and transport. Its approach is to improve, in particular, transport infrastructure and other capital projects, as opposed to general deprivation levels.

[Lord Lancaster of Kimbolton (Con)]

My Lords, I am sure that the whole House supports the Government’s agenda in what it is seeking to do with levelling up. I confess that I am always slightly nervous of the habit of successive Governments of judging success by financial input. My noble friend has already mentioned that there will be an ongoing assessment of these projects. Can he reassure me that, should that ongoing assessment demonstrate that the projects are not delivering a return for the taxpayer, they will be stopped and the money reallocated?

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, I can give that assurance that, as we go through the rounds, we will make assessments and judge on outcomes. That is why it is terribly important to have an outcomes framework, as has been published, and that we continue to see progress against those metrics identified in that framework.

[Baroness Stuart of Edgbaston (Non-Afl) [V]]

My Lords, the levelling-up fund was a bit West Midlands-light, but there is still time for this to be remedied. When the Minister looks at success and repeats that the framework is about productivity, skills, transport and unemployment, I urge him to pay particular attention to the 50% of young people who do not go to university. If we do not deliver for them, whatever other levelling up we are doing, we will have failed.

[Lord Greenhalgh (Con)]

My Lords, I point out that this fund is available to all authorities, including those in the West Midlands. Those not in category 1 should apply. All bids will be judged on their deliverability, strategic fit and value for money. I am sure that there will be opportunities for the West Midlands Combined Authority to be one of those who will be a beneficiary of the fund.

[Lord Oates (LD) [V]]

My Lords, does the Minister agree that, while we are levelling up, we also have an important opportunity to advance the UK’s green objectives? In that context, will the Government ensure that the bid criteria are designed to encourage bids that would help increase biodiversity and tackle climate change?

[Lord Greenhalgh (Con)]

My Lords, I have been clear that the focus of this fund is to prioritise those areas where there is a need for economic recovery, transport connectivity and regeneration. I am sure that this will be done in the most environmentally friendly way possible.

[Baroness Warsi (Con) [V]]

My Lords, I welcome the Statement and the Government’s levelling-up agenda. Levelling up is about ensuring that we strip away the barriers stopping people and places from achieving their full potential. As evidenced in numerous reports—some commissioned by the Government—race has, sadly, been a de-leveller for many in our country. Does racial equality inform the Government’s levelling-up agenda and, if so, how?

[Lord Greenhalgh (Con)]

My Lords, in order for there to be a reduction in economic disparity, of course that needs to touch on the issues that my noble friend raises. The proof of the pudding will be that we see those left-behind areas with large minority communities level up with those areas that are economically more successful.

[Lord Inglewood (Non-Afl) [V]]

My Lords, as chairman of the Cumbria Local Enterprise Partnership, I welcome these levelling-up initiatives. As the Minister has pointed out, levelling up is not simply a northern or an urban challenge. As has been pointed out, the headings of expenditure described in the Statement are a mere drop in the ocean of what is needed nationally, but they are a start. Can the Minister tell the House how, and in what specific ways, public expenditure and policy will be recalibrated to take this levelling-up agenda forward, at the same time ensuring that this is not done at the expense of global competitiveness?

[Lord Greenhalgh (Con)]

My Lords, I do not see the levelling-up agenda as being anything other than helping us to be more economically competitive at a global level. I am sure that there will be opportunities to refine the outcomes frameworks and the metrics used to ensure that we are successful in our desire to raise all boats.

[Lord Scriven (LD) [V]]

My Lords, can the Minister explain why the time to travel to work in a car, such as a Bentley or a BMW, is a weighted factor worth nearly 20% of all weighting to steer funding for levelling up economic recovery, growth and regeneration of an area?

[Lord Greenhalgh (Con)]

My Lords, I do not think that it is entirely fair to categorise an area with poor transport infrastructure by reference to the speed and distance travelled in a Bentley. The focus of this fund is to deal with the challenges that we have around the need for greater connectivity, and it is those projects that will be funded.

[Lord Lucas (Con) [V]]

My Lords, I congratulate the Government on the superb structuring of this fund: the insistence on collaboration; the way in which councils and MPs are involved; and, in particular, the seeking of support from civil society in all its forms. In the context of Eastbourne, this has produced a ferment of ideas and enthusiasm which will do us a great deal of good going into the future. But as a seaside town whose income has been wiped out by Covid and which is staying solvent only by the grace of my noble friend’s department, how are we allowed to fund our 10% share of the bid that is asked for? If we bid now for phase 1 of our regeneration, can we include 5% or so of our bid to finance the feasibility study for phase 2? For that, we ought to have widespread public consultation and consideration of alternatives to give our larger plans a firm base, but in our current financial state we do not have the revenue out of which to take that funding.

[Lord Greenhalgh (Con)]

My Lords, I know that my noble friend will be delighted that Eastbourne is within category 1 in terms of being prioritised within the index of places. That means that Eastbourne and its council can draw on support, where there is an absence of capacity or perhaps not enough funding available, of up to £125,000 for the preparation of the bid. I point out that councils are merely encouraged to put some of their own resources towards the bid funding; it is not necessarily a prerequisite. In the case of Eastbourne, the Government are providing that funding to make sure that there is the best possible opportunity for the council to be successful in its bid for the fund.

[The Deputy Speaker (Baroness Garden of Frognal) (LD)]

My Lords, all supplementary questions have been asked and answered. Congratulations to the Minister and congratulations to the Back-Benchers.