Town Deals: Covid-19 Recovery

Jeff Smith Excerpts

Wednesday 14th July 2021 Westminster Hall

[Jeff Smith (Manchester, Withington) (Lab)]

It is good to see you in the chair, Mr Rosindell. I appreciate the opportunity to respond on behalf of the Opposition,. I congratulate the hon. Member for Southport (Damien Moore) on securing the debate. Southport is a town I have enjoyed visiting but did not know it was the model for Parisian boulevards—never let it be said that Westminster Hall debates are not educational. I agree about the need for good connectivity to Manchester so my constituents can enjoy the Southport Eye, and I look forward to seeing it.

This is an important topic and useful opportunity to look closely at what the Government has promised under the town deals, how much has been delivered and to consider whether this the right way to drive recovery from covid-19. I thank the Members who have spoken in this debate. We have heard about the importance of reasonable private rents, need for reform of business rates, shopping local and wider access to funds. The hon. Member for Leicester East (Claudia Webbe) made important points about areas that have been left behind under austerity.

Labour wants to see towns up and down the country thrive, and we are pleased for any community that has managed to receive funding from the towns fund, but we have to put this into context. There is a reason why so many towns are struggling, in desperate need of investment, regional inequality is rife in this country, and high streets are at breaking point. It goes back far beyond the covid crisis. The Government likes to talk about levelling up, but over the last 10 years they have imposed £15 billion cuts on local authorities. I hardly need to point out that outweighs the one-off £3.6 billion towns fund that will benefit a minority of English towns. The pandemic has heaped even more pressure on local councils, but the Government have broken their promise to fully compensate them for the costs of tackling covid-19, leaving a further gaping funding gap to cover and forcing many to raise council tax to cover costs, making local families pay.

The long-term decline of the UK’s high streets, with footfall down 10% since 2012, has complex reasons behind it and has left around one in 10 high street shops standing empty, even before coronavirus hit. In the past decade, 773 libraries, 750 youth centres, 1,300 children’s centres and 835 public toilets have closed down largely because of austerity. In addition, our social care system is in crisis. After several years of kicking the can down the road, the plan for reform, which the Prime Minister claimed he had already prepared, has not been forthcoming. Families, care staff and local authorities are crying out for that plan. Most recently the Government appear to have confirmed our worst fear: the Chancellor intends to proceed with the £20 cut to universal credit from September, which will push more than half a million people, including 200,000 children, into poverty. How can the Government claim they are about levelling up one day and plunge some of our least well-off citizens into difficulties the next? That is not the way to recover from covid-19.

Even if administered fairly, the towns fund would only act as a sticking plaster over these problems. However, we do not know if it has been administered fairly because, typically of this Government, the allocations process is—I am being generous here—opaque. Let us not forget that a town in the Secretary of State for Housing, Communities and Local Government own constituency of Newark was selected for funding under the towns fund by the then Communities Minister, the right hon. Member for Rossendale and Darwen (Jake Berry), while the current Secretary of State selected Darwen in the former Minister’s constituency.

The allocation should have been a fair and open process but instead Ministers seem to have stitched up back-room deals that aim to funnel money into relatively wealthy areas and away from those who need it most. Ministers refused to consult directly with elected mayors with the process concerning towns in their regions, despite the Government’s own officials explicitly recommending that they do.

Investigating the allocation process for the towns fund in November 2020, the Public Accounts Committee said:

“The selection process was not impartial…The justification offered by ministers for selecting individual towns are vague and based on sweeping assumptions. In some cases, towns were chosen by ministers despite being identified by officials as the very lowest priority…The Department has also not been open about the process it followed and it did not disclose the reasoning for selecting or excluding towns. This lack of transparency has fuelled accusations of political bias in the selection process, and has risked the Civil Service’s reputation for integrity and impartiality.”

If the Government have nothing to hide, why not be transparent about the decision-making process?

For those who have been lucky enough to get some funding, it is now almost exactly two years since the towns fund was announced and the Government are still vague about what they actually hope to achieve using the fund and how they intend to measure success. Since the fund was announced, only 5% of the money committed so far—£90 million out of the promised £3.6 billion—has been paid out. Heads of terms have only been agreed with 53 of the towns, and it is unclear whether one single project has been delivered in full. In fact, there is a concern that, with so many delays, some projects may not be viable by the time the Government have finally stumped up the money.

The Government say they are aiming to deliver town deals by 2025-26. In a time of severe economic downturn following the pandemic and with support such as furlough ending and universal credit being cut, we need to support the covid recovery with a sense of urgency and boost local areas in that context. It only fuels the suspicion that the Government are more interested in stretching out the announcements when it most suits them, rather than urgently stimulating local growth and job creation.

If we want the towns fund to help with the recovery, how do we know if it is working? In a written answer earlier this week, the Minister said:

“The Department will publish a monitoring and evaluation strategy for the Towns Fund. This strategy will set out the evidenced framework and theory of change, which underpin the evaluation methodologies for the Towns Fund, a work plan, timeline and key milestones, and a bibliography.”

Two years after they announced the fund, the Government say they “will publish” their strategy, so they have still not laid out how they are going to monitor and evaluate the fund.

Any funding for our towns is better than no funding at all, and Labour supports those who have been lucky enough to get something, but what about the majority who have not? This is, after all, the same Department that has announced a levelling-up fund that again pits regions and nations against each other for crucial funding and that will hand money to wealthy areas held by Cabinet Ministers ahead of areas in greater need.

The methodology prioritised the Chancellor’s own local authority for regeneration funding ahead of more deprived areas, such as Barnsley, Flintshire, Coventry, Plymouth, Salford and the Wirral. Prioritised constituencies included those of four other members of the Cabinet. This Government cannot repair even a small part of what they have destroyed over the past 10 years using piecemeal pots of funding, let alone build back better from the covid pandemic.

Labour supports funding for every town and every region, and that has to be done transparently, fairly and with a say for local communities. Through the towns fund the Government are making promises to a minority of English towns, with many of those in need losing out. The Government need to set out a detailed account of exactly what the towns fund aims to achieve, what it will fund and, importantly, how it will measure success. Piecemeal pots of funding do not make up for a decade of cuts to local communities.

Now, more than ever, we need to give all our local areas the funding they need to recover from the covid pandemic. The real yardstick of success will be if this Government put opportunities on everyone’s doorsteps. We have seen little evidence so far that the towns fund will do that.