Levelling-up and Regeneration Bill

Baroness Taylor of Stevenage Excerpts

Committee stage
Wednesday 22nd February 2023 Lords Chamber

Moved by

[Baroness Taylor of Stevenage]

50: After Clause 5, insert the following new Clause—
“Levelling Up FundIf an allocation is made from the Levelling Up Fund, a Minister of the Crown must publish a statement explaining how the allocation supports the levelling-up missions.”Member’s explanatory statement
This means that the Government must explain how allocations from the levelling up fund support the levelling up missions.

[Baroness Taylor of Stevenage (Lab)]

My Lords, I add my thanks to the noble Lord, Lord Holmes, for an interesting debate on robotics. It was an interesting answer from the noble Earl as well.

I am speaking to Amendment 50 in my name, the amendment tabled in the name of my noble friend Lady Hayman and in support of Amendment 57, submitted by the noble Baroness, Lady Valentine. I am grateful for her engagement with me and with my noble friend Lady Hayman on this part of the Bill.

The levelling-up fund, well intentioned as I am sure it was, has generated more light than heat so far. The unfortunate Hunger Games-style bidding process pitted areas that all have legitimate needs against one another, wasted millions in the application process and has seen the bids eaten away by inflation. That has broken too much of the promise with which the fund set out. In fact, just today, SIGOMA—the Special Interest Group of Municipal Authorities—published its analysis, saying that there is no strong correlation between deprivation and allocation from either round 1 or 2 of the levelling-up fund. It seems that even the Treasury is concerned about the fact that there appears to be little to link the allocations with identified regional inequalities, or any strategy to show the contribution that the fund is making to the overall strategic aims of the missions.

As we heard earlier today, regional inequalities are going in the wrong direction and therefore increasing. I referred earlier to those issues. Transport is one example. There are many examples of bus services being lost up and down the country and an appalling situation relating to train cancellations, which are now at a record high.

The noble Baroness, Lady Pinnock, in an earlier group, set out the shocking fact that Leeds has spent a third of a million on the bidding process, which achieved absolutely no return whatever. We do not yet know what the total figure is for the UK but, in these desperate times for local government funding, it is a travesty that authorities are having to put that much money in without any idea as to whether they will get a return—something that you would never tolerate in business, I suspect.

In the amendments debated on day 1 of Committee, a strong case was made for including the missions in the Bill—we heard more about that today—to ensure that there is clarity of purpose and so that we can be sure that funding allocated for levelling up clearly demonstrates which mission or missions it is aimed at. Of course, we are very pleased for those areas that received levelling-up funding. I was with the leader of Broxbourne Council yesterday and he was delighted to have been successful in his bid. But, given that local government has lost £15 billion in funding since 2015, a funding round of £2.8 billion is crumbs from the table when there are communities that are desperate, really desperate, for investment.

It is of great concern that in the round 2 bids, there was rock-bottom allocation for Yorkshire and the Humber, and nothing for Birmingham, Nottingham, Stoke, or the Stonehouse community in Plymouth that is in the bottom 0.2% for economic activity. We really must do better than explaining the criteria for bidding after the submission of the bids has closed, which happened with round 2. It has also become apparent that the impact of inflation on round 1 bids has meant that some of them have had to be re-evaluated, some of them have not even had a spade in the ground so far, and there is no clear path for meeting the added costs. I am sure that the Minister, with her extensive experience in local government, knows that expecting local authorities to meet inflation costs from their hard-pressed budgets, on future bidding rounds or even on the existing ones, is unrealistic.

I am sure that what local government would really like to see is not these constant bidding rounds—it is not just the levelling-up fund, there are others as well—but a real long-term plan for a sustainable and fair funding system meaning that local areas can plan for their own futures and focus on delivering levelling up in their area, rather than competing for successive bidding rounds. I served on the fair funding task force for over five years. It does not seem to have got anywhere very far. It is about time we recognised that real localism means real funding for real local authorities to deliver what their areas need.

The amendments are designed to ensure that we have clarity around the link between the missions and the funding, and to make provision for review after a year to ensure that they are delivering against anticipated outcomes. I am sure that even the Treasury would agree with that. I beg to move.

--- Later in debate ---

[Baroness Scott of Bybrook (Con)]

I will be very happy to provide that information.

[Baroness Taylor of Stevenage (Lab)]

I thank noble Lords for the debate on the levelling-up fund. It is a key issue to discuss as we go into the Bill because, clearly, none of the levelling-up project will happen without proper funding, and most of us in local government certainly feel that the levelling-up fund has not been the way to do it.

I want to start with the issue of categories 1, 2 and 3. Those categories deterred some authorities from applying because people felt that, if they were in a higher-banded category, they would not have any chance of getting any funding. It was very disappointing when they did not bid because they thought they were not going to get any and then found that others in the same category, and some in higher categories, were allocated funding. So I support the request from the noble Baroness, Lady Pinnock, for some explanation of how that banding works.

My second point is about how the Treasury is feeling about round 3. I am not clear on what the Treasury has done in terms of the levelling-up fund: whether it has stopped round 3 for the time being, whether it has delayed it or what it is doing with it. It would be interesting to know how that is going to happen going forward.

The Minister mentioned match funding, and I am sure that she is as aware as I am that the various places that it used to come from are scarce and in very short supply these days. So match funding can also deter people from bidding for things. I know that it is not compulsory to have it, but, if you think you will not achieve your bid without it, it may deter people from bidding in the first place. It seems almost certain that the areas that need match funding the most are the least likely to have access to it, so it goes against the principles of levelling up.

I was pleased to hear the Minister talk about the recognition of the need to address the complexities in the funding landscape, which is vital. Moving forward, as the delivery of the missions gets more complex, we absolutely need to be clear about a straightforward mechanism for funding.

I was pleased to hear the speech of the noble Baroness, Lady Valentine, which was helpful. I am grateful for the work that Business in the Community does across the country in helping to move the levelling-up agenda forward. I was impressed and pleased that she mentioned the issue around capital funding and having revenue funding to support it. Too often, funding pots are allocated and things are built and delivered—because that is what ticks the box for the department concerned—but the ongoing revenue for that project is not considered and ends up being a local burden that can, in some instances, result in the original project never being delivered properly, because there is not the revenue to deliver it. So I hope that future funding pots will take that into consideration.

I was shocked about the Blackpool project being funded but then going into a period in which it is not. You cannot stand these projects up and down at very short notice: they take a lot of planning, and the disappointment for young people engaged in something when the tap is turned off and that project stops is almost worse than doing nothing at all, because it adds to their feelings of having things taken away from them.

On the short timescales and short delivery times, if levelling up is going to work properly, it must work with a great spirit of co-operation and collaboration between those tasked with delivering it—there may be more than one public agency doing that. Having these very short bidding times and delivery times in some instances is not at all helpful, and I hope that that can be taken into consideration.

We heard information about the town deals and the towns fund. I have been quite close to one of them, and, although there is an equal lack of transparency in allocation, there was very serious scrutiny of what the outcomes would be before the bidding and allocation. That is something that we should look to for the future.

I was pleased to hear the remarks of the noble Lord, Lord Stunell, about the serious lack of credibility in the scheme. I talk to my colleagues in local government all the time, and there is no doubt in my mind that there has been a great loss of credibility in the scheme. The Minister referred to a feedback process; it may be that that has got going fairly recently, because the second-round funding has only recently been announced. But those who were involved at the time certainly felt that they had not had an adequate opportunity to receive any feedback. Of course, they want to learn because, if there will be multiple rounds of this, people want to know what they did wrong and, equally, the ones who got it right want to know what they did right.

The noble Baroness, Lady Pinnock, referred to the reason we have been pressing so hard on these definitions of geography, missions and metrics, and how they will be used: because of how they will be used to determine funding. Even if funding for levelling up were to be considered for a completely different model—such as one much more like the sort of model I would like to see, which is local government being given the funding and being allowed to get on with it—surely we must have a method which determines how funding follows need, rather than just whoever puts in the shiniest bid at the time.