UK Shared Prosperity Fund: Rural Areas

Neil O'Brien Excerpts

Wednesday 11th May 2022 Commons Chamber

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Neil O'Brien)]

I congratulate my hon. Friend the Member for Rutland and Melton (Alicia Kearns) on securing a debate on this important topic and on her superb speech. I also acknowledge the important contributions from the hon. Member for Strangford (Jim Shannon) and my hon. Friends the Members for Loughborough (Jane Hunt) and for Penrith and The Border (Dr Hudson), who were making some similar and important points in a debate just a couple of weeks ago.

We should start by recognising that many positive things are happening in Rutland, Melton and the parts of the Harborough district that my hon. Friend the Member for Rutland and Melton represents, and many of them are happening because of my hon. Friend. She has been a relentless champion for fairer funding for Rutland and Leicestershire. She has secured the Melton Mowbray distributor road, which is key to levelling up Melton; after 40 years of discussions, she and local colleagues have finally made it happen. Rutland Memorial Hospital has been saved after the commitment she secured from the clinical commissioning group. She raised broadband, and I am pleased her efforts paid off and put Rutland in the very first tranche of the gigabit upgrades in the country. She also helped secure £150,000 for a community hub in Thurnby and £150,000 for a pub in Frisby from our community ownership funds, and I look forward to drinking in them at some point. Of course, her local authorities have also benefited from funding from the UK shared prosperity fund: Rutland, Melton and Leicestershire are receiving over £5 million of UK SPF funding, with Rutland getting over £1 million, Harborough over £2.1 million and Melton just shy of £1.2 million. On top of that, Leicestershire is receiving nearly £3 million in multiply funding.

On the SPF, my hon. Friend raised a series of important questions about flexibility and rurality which I want to address directly. Even the last Labour Government acknowledged that spending on regional economic policies should have been brought back from Brussels and decided here, but they never managed to bring it back or get the EU to agree to that. Now that we do have control back, we can do things differently. The SPF fund will be radically more flexible than previous EU funding, and also much more locally led. Under the last Labour Government, funding was given to remote and unelected regional development agencies based far from Rutland and Melton; under the SPF, it will be given to individual districts and elected local leaders so it is much more local. In addition, bureaucracy will be slashed and there will be far more discretion over what money is spent on. EU requirements for match funding, which impacted on poorer places in particular, will be abolished. The EU system—with payment in arrears, multiple rounds of auditing and multiple rules, and lengthy application documents that all made it difficult for small local voluntary groups in particular—will be swept away. Under the EU funding, only a narrowly defined set of things could be funded, but under the SPF the investment priorities deliberately cover a very wide range of possible interventions because that is what local leaders said they wanted from us. Whether digital connectivity, buses, skills, improvements to high streets, community events, or sports and festivals, the choice for the first time will belong to local leaders and local communities. Rural communities will be empowered to set and deliver against their own priorities through the fund, shaping things locally and not having to apply to a remote RDA based in a city far away.

In terms of allocations, the SPF matches in real terms the previous spend in each local enterprise partnership area because we were conscious of the need for continuity for ongoing programmes. Within those LEP areas we have used the same index of community renewal that we developed for the community renewal fund. One reason why we used that is precisely because, unlike previous funding formulas, it explicitly recognises the challenges of rurality and sparsity to tackle the very unfairness my hon. Friend raised.

The SPF is only one of the funds we are using to give financial firepower to places. The £4.8 billion levelling-up fund, which recently opened for its second round, could be used to boost some of the fantastic rural food businesses that she mentioned, or to make the most of the incredible cultural discoveries that she also mentioned. She noted that Rutland and Melton were in tier 2; again, that is because the index for the levelling-up fund recognises the challenges of rural and poorly connected areas in a way that previous Governments have not. We have also created new funds such as the community ownership fund, which particularly helps rural communities where hub assets are so important to villages and smaller places. The £3.6 billion towns fund is regenerating communities throughout the country, and there is more to come, with the £1.8 billion brownfield fund mainly still to be allocated, which will help drive regeneration and save valued green spaces.

[Alicia Kearns]

The Minister mentioned community ownership funds. There is a pub in Stathern in my constituency which, having seen the success of the Bell in Frisby, would like to do the same with the Red Lion. When will the next funding round be opening—I know the Department is keen to learn from previous rounds and help people apply for the next round of the community ownership fund?

[Neil O'Brien]

It will be opening extremely shortly. I will take that offline with my hon. Friend, and we have indeed tried to learn lessons to improve that aspect of the fund from the first round.

My hon. Friend raised a number of other critical issues. She talked about the need for more GPs surgeries. I wholly agree, and the Levelling Up and Regeneration Bill published today responds to exactly that issue and to the campaigning by her and other hon. Members here.

We must ensure that development always comes with the infrastructure that is needed. Section 106 has seen money handed back to developers, which is intensely frustrating for local communities: projects become outdated by the time money is available, money cannot be adequately pooled to add up to major projects, it is not a transparent system and it does not reflect the cumulative effect of development because funds cannot be pooled properly.

The new infrastructure levy that we propose through that Bill will change all that. It means more money for local communities, more of the benefits of development for the local community and not just developers, more local control over what it is spent on and matching of new housing to the infrastructure that is needed.

My hon. Friend also talked about the challenges of digital connectivity in rural areas and her success in the early roll-out. We are investing £5 billion so that hard-to-reach areas can get gigabit speeds. More than 67% of UK premises can now access gigabit-capable broadband, an enormous leap forward from July 2019, when coverage was just 8%. That is a spectacular transformation. The £1 billion that we are investing in the shared rural network will particularly help to improve mobile signal in rural areas such as Rutland and Melton, so that she can spend even more time when she is on the A47 lobbying Ministers with brutal effectiveness.

My hon. Friend talked about the critical issue of local government finance. The overriding ambition of the Government is to keep bills low by giving councils the tools and firepower to keep taxes low while offering first-rate services to their residents. The Russian invasion of Ukraine has an impact on that and makes the cost of living even more important. Our local government finance settlement for 2022-23 meets that ambition by providing an additional £3.7 billion of funding to local authorities, including support for adult social care reform, which is critical for rural areas with older populations.

In my hon. Friend’s constituency, that funding translates to a cash-terms increase in core spending power for Harborough council of 6% compared with last year; for Melton it is a 9.3% increase and for Rutland a 7.4% increase. For Leicestershire County Council it translates to a 6.9% increase compared with the previous year. The new funding we have made available is the largest cash-terms increase in grant funding provided through the settlement in the past 10 years and is testament to the support we are affording councils in every corner of the country, especially those outside our major towns and cities.

My hon. Friend is quite right to say that these things can always be improved, and I am sure she will continue to power forward on this agenda.

[Alicia Kearns]

The Minister is a neighbour of mine, and I just want to point out that without him I do not believe we would have made such progress on fair funding for this country and the improved settlements. While he cannot publicly lobby for his own Market Harborough constituency, I know that all Leicestershire MPs wish to put on record their gratitude to him. Since I cannot ask him to agree with that, I will instead ask him to confirm that he will continue to keep his eye on funding for Leicestershire and Rutland.

[Neil O'Brien]

I am not entirely sure what I should say in answer to that question. Instead, I will finish by thanking my hon. Friend for bringing this very important issue to the House today. In the past, the rural economy has not always had the attention or the credit it deserves, but Governments who undervalue rural communities do so at their peril, and we will never do that.

When I was in Uppingham just the other day on market day, I saw all the attractions and the wonderful things that my hon. Friend’s constituency offers in the incredible, vibrant town centre. It is a wonderful place. However, we as a Government also see the challenges of maintaining those rural bus routes and the challenges of an older population. It is wonderful that Rutland has the highest male life expectancy in the entire country, but that brings with it the higher cost of looking after a group of older people well.

Rural places do not have the momentum that larger cities have had, because of the changes to a services-based economy over the past 20 years that have helped capital cities and large cities particularly at the expense of rural areas. We are conscious of those challenges. We have made unprecedented changes to the funding formula to recognise the challenges that for too long, as my hon. Friend said, have been neglected. Under this Government we are addressing those things. I will disagree with one thing she said: she was worried that sometimes these things are forgotten in Government, but I can promise her they will never be forgotten in this Government.

Question put and agreed to.