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Levelling-up fund is poor compensation for the ravages of austerity

The latest £2bn round of levelling-up funding is a drop in the ocean compared with the fall in local authority budgets since 2010.

By Jonny Ball

Just over three years ago Boris Johnson entered Downing Street on a promise to “Get Brexit Done” and “level up” the country. Of the pair of slogans, the latter was more slippery. Dan Jarvis, the former mayor of South Yorkshire, told the New Statesman last week that levelling up “meant different things to different people”. Parliament’s business committee described it as a “slogan in search of a policy”.

The confusion wasn’t entirely dispelled by the publication of a 300-page white paper last year – a sprawling document that covered everything from Medici Florence to the late-twentieth century wave of deindustrialisation in the north of England. It proposed 12 key missions and metrics by which the levelling up policy could be judged, including a reduction in regional health inequalities, the closing of productivity gaps, and a fairer distribution of research and development funding.

The report was light on concrete solutions to the structural problems it diagnosed, however. One thing it did not propose was a restoration of funding for local government to the levels seen before the onset of austerity. Many local authorities in deprived parts of the country have had their central government grants reduced by up to two-thirds since 2010. That means closed libraries, closed children’s centres, fewer housing repairs, dirtier streets, poorer roads, less investment in training, infrastructure and local businesses, and a creaking social care sector that piles yet more pressure on an overstretched NHS. Britain remains the most geographically unequal country among its comparable competitors.

For all the ambiguities of levelling up, it’s unlikely that most would associate the policy with regeneration projects based in Rishi Sunak’s leafy, rural and relatively affluent constituency of Richmond. People might also be shocked to hear that more levelling-up funding has been directed to London than to the north-east. But that’s exactly what has happened with the latest announced round of successful project applications. Of the £2.1bn package, £19m will go to rejuvenate Catterick Garrison town centre in the Prime Minister’s seat. Analysis by the Labour Party has shown that London will receive £151m worth of investment, with the north-east receiving only £108m.

[See also: Where next for levelling up?]

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The amount of funding on offer is dwarfed by the scale of local government cuts that have been imposed in the last decade. When the government announces more of these bidding wars it is, in effect, offering part-compensation with one hand for the damage it has caused with the other. The whole centralised funding pot model has been the target of much criticism even from Conservative quarters, with the Tory west Midlands mayor Andy Street calling for an end to what he describes a “broken begging bowl culture”. Shadow levelling up secretary Lisa Nandy characterised the process as a “hunger games-style contest” pitting different localities against each other.

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It’s not the first time the levelling-up agenda has been beset by accusations of favouritism and old-fashioned “pork barrel politics”. In 2021, when the government identified priority areas for the levelling-up fund, towns and cities that ranked far higher by indices of multiple deprivation were overlooked in favour of wealthier market towns represented by cabinet ministers.

Today Johnson sits on the backbenches. His immediate successor, Liz Truss, crashed and burned in a matter of weeks. Now Sunak is the custodian of levelling up. The Times reported last week that Conservative MPs had been instructed to stop using the term altogether. When he was chancellor, many accused Sunak of blocking the required resources to truly make a dent in the country’s regional disparities, and he has brought his fiscal conservatism with him to No 10.

Last year the levelling up minister at the time, Neil O’Brien, told the New Statesman that the policy was a response to “changes in the fundamentals of politics in the UK” and showed a “changed Conservative Party”. It allegedly was part of demonstrating a genuine desire to consolidate the working-class vote in left-behind towns and smaller cities in the north and the Midlands. The announcement of recipients for the latest round of funding only represent the latest nail in the coffin of this idea, and that won’t go unnoticed in what was once the red wall. It demonstrates, in fact, that the Conservative Party has reverted to type, or maybe that it never changed much at all.

[See also: Rishi Sunak faces a fresh Tory revolt over levelling up favouritism]

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