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19 January 2023

Rishi Sunak faces a new Tory revolt over levelling up favouritism

As the south wins out over the north, the government can’t pretend the money exists to address regional inequalities.

By Freddie Hayward

At every Prime Minister’s Questions, a Tory backbencher will ask Rishi Sunak to support their constituency’s bid for money from the levelling-up fund. They care. The polls are bad. Tory MPs know they need to deliver for their constituents, many of whom voted Conservative for the first time in 2019. And the government haven’t given them much else to write home about.

Hence the disgruntlement on the Tory back benches last night when the second tranche of successful bids to the levelling-up fund were announced. The government did publish the broad criteria by which the money was allocated, but the ultimate decision was down to ministers. I hear ministers won’t deliver an oral statement in the House of Commons later to dodge the opprobrium from their back benches. Why the anger? More money has been given to the South East than Yorkshire, the West Midlands and the North East. Many affluent areas such as Rutland, North Somerset and the Malvern Hills are on the list. Are the polls so bad that Rishi Sunak is shoring up Conservative seats in the South East at the expense of those in the north of England?

Beyond the internal Tory politics, the government’s levelling-up agenda is beset with problems. As the Local Government Association notes, the bidding process for the fund is expensive and laborious for councils and other stakeholders. Many of the projects awarded money are now at risk due to rising inflation, particularly in the construction sector. Even then, according to Jack Shaw from Cambridge University, only £243m or 5 per cent of the original £4.8bn levelling-up fund has even left Whitehall.

Let’s assume all the money was handed out in an efficient and timely way, it would still barely ameliorate the cuts imposed on local government since 2010. Central government grants to local councils were cut 37 per cent, or £15bn in real terms between 2009/10 and 2019/20. That far exceeds the amount in the levelling-up fund. As one cutting Labour source put it, “this is a partial refund at best”.  And local government spending is only one issue, significant investment in transport links is required. Yet Sunak’s government has curtailed the Northern Powerhouse Rail project – a highspeed rail network connecting the north of England.

For all the fanfare today, the underlying problem with the levelling-up agenda persists: that the government can’t address regional inequalities – exacerbated by austerity, but predating 2010 – through a catchy slogan and a few billion quid.

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[See also: Where next for levelling up?]

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