The levelling up lark

You would have thought that going around with a bag full of money, and handing out cash for projects in England and Wales would increase the popularity of the government. I think the government thought so too, but it hasn’t worked out that way.

But what is levelling up and how is it supposed to work?

The interwar years

This phenomenon was first seen in the interwar years during the great depression, where mainly industrial areas such as South Wales and the North-East suffered badly as trade declined, because of Britain being on the gold standard and making exports uncompetitive and later the great depression.

In those days such areas were termed distressed or special areas and elicited a response during a visit from the then Prince of Wales, “That something should be done.” Today our understanding of deprivation and deprived areas has changed considerably from that of the 1930s, but we seem no further ahead in tackling the issues of deprived status and still something remains to be done.

Later models

In the 1980/90s the approach was to take over an area like London’s dockland, that had become a victim of containerisation, and transplant a new settlement or industry and, to some extent, for London it has worked, though I am not sure the poorest or most deprived were always given sufficient assistance.

In the new century, the approach of New Labour was more people driven. Here the approach was increased payments to increase low incomes, children’s centres (Sure Start) to inculcate better parenting, and education, education and education.

The effect of austerity

Since 2010, austerity policies have reduced the financial resources available from the treasury and local government, so some MPs are not impressed by the apparent largesse of levelling up grants as one put it in the recent Parliamentary debate:

“Over the last decade or so, the cut to local government – in cash terms rather than real terms – is £15 billion. Today’s announcement gives back £2.1 billion. The Government have nicked a tenner from our wallets and expect us to be grateful for getting less than two quid back. We are pleased for the communities that have been successful because they have been starved of cash for years but, in reality, even those communities will still get back less than the Government have taken from their budgets.”

Deprivation still rising

Not only has deprivation increased overall (increasing numbers of food banks, real wage growth sclerotic) but existing areas of deprivation have remained ‘unlevelled’. In 2023 levelling up is facing the headwinds of an energy crisis that is hitting the poorest in society more heavily, inflation where wages are trailing inflation by some margin, and reimposed austerity, after the short-lived Truss government destabilised investor confidence and caused a steep rise in interest rates above those already imposed by the Bank of England. Added to these challenges is the existing crises over health provision and housing availability.

Competing for funds

Since 2010, Levelling up has been applied by competitive funding schemes via various funds such as the Coastal Communities Fund, the Towns fund and UK Prosperity fund.

Communities and organisations are invited to bid. The bids are assessed by civil servants and short lists are drawn up. Sometimes even the invitations to bid are shortlisted before they are submitted by principal councils, so that only a single candidate project goes forward from an area.

The shortlisted projects are then asked to submit a fully worked out scheme, funding for this part of the process may be forthcoming from the government, to pay for consultants, planning permissions, and expenses of one sort or another.

Finally, the project is submitted, and is then subjected to assessment and here is where alchemy is applied. According to the Government spokesman during the recent Parliamentary debate on this:

“The levelling-up fund has a clear and transparent process for determining how bids are selected. Each bid is assessed by officials against the published assessment criteria, with the highest scoring bids shortlisted. To ensure that there is a fair spread of bids across the UK, funding decisions are then based on the assessment score and by applying wider considerations such as geographic spread and past investments. A place’s relative need is also baked into the process. In this round, 66% of investment went to category 1 places. As we did for round 1 of the fund, an explanatory note setting out the details of our assessment and our decision-making process will be published on gov.uk. Ministers did not add or remove bids from the funded list, as set out in the note.”

Shiny, happy people; and the rest

However, in my view, the selection will involve some sort of political calculation. Now this does not mean that the pork barrel is involved, but it will mean that only eye-catching projects will win out, such as art centres, tourist attractions etc. Politicians are like magpies, they like shiny things, rather than what may seem worthy and prosaic.

Those projects receiving any cash will be quietly smug, and think how clever they were in bidding for the cash, and those not getting the cash will say it is unfair, and that their scheme was worthy of inclusion. Central government funding schemes are never as successful as those who devise them in government often believe and for some time, critics have felt that there are better ways of distributing the cash. One of them voiced this in the Parliamentary debate:

“Why do we not stop the pretence that this has anything whatever to do with levelling up? Councils have to spend a lot of time bidding for one of about 300 pots of money. There is no real strategy at all and no joining up between the different bids. They look more like photo opportunities so that Ministers can go around the country announcing the successful results. Why will the Minister not listen to the Levelling Up, Housing and Communities Committee? We called for the bid process to be dropped for the most part and for Government Departments to instead consider how they can reposition the totality of their spending on a strategic basis to help the poorest parts of the country.”

Beware the one-trick pony

The real question for me is not whether levelling up is a good idea, because clearly it is, but whether one-trick pony shows are the most effective. Working with communities directly, by embedding best practice by agreement and with a large measure of patience and good will, is going to be a lot more resilient than any trick pony project, foisted upon a bemused community, by a bunch of suits that are helicoptered in to show the natives how to run things.

Editor’s Note: This article will be followed by another giving examples of local projects.