Levelling-up Fund Round 2

10.37 am

To ask the Secretary of State for Levelling Up, Housing and Communities to make a statement on round 2 of the levelling-up fund.

First, Mr Speaker, I apologise; we can always improve on our communications. I believe letters were sent both to MPs and to councils last night and the Secretary of State did make a written statement, but I accept that we can improve on this going forward.

Levelling up is one of the driving missions of this Government as we look to build a stronger, fairer economy. As the Prime Minister set out a fortnight ago in his five people’s priorities, levelling up is how we will grow our economy, spread opportunity across the country and build stronger communities with safer streets for people to live on.

The levelling-up fund is essential to how we will develop that opportunity, which is why we have today set our next wave of investment for projects up and down the UK. The second wave will see up to £2.1 billion-worth of funding, awarded to 111 bids that we know will stimulate growth and benefit communities.

The levelling-up fund is about directing funding where it is needed most. Local leaders and Members across this House have seen the impact of the first round of funding, with 105 bids receiving £1.7 billion to drive regeneration and growth in areas that have been overlooked and underappreciated for far too long. That is why we received a tremendous response to the second round, with more than 500 bids received totalling £8 billion, which is a significant increase on the 300-odd bids received last year.

Across the two rounds of the fund, we have allocated nearly £4 billion to more than 200 bids from communities across the UK. I am pleased that we have been able to work closely with parliamentarians, local authorities and the devolved Administrations in all parts of the United Kingdom.

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.

Thank you, Mr Speaker, for granting this urgent question.

The Government are running scared of Parliament and their own Back Benchers—judging by the faces behind the Minister, I can understand why. However, there are serious questions to be answered. Levelling-up is a failure: the Government are going backwards on their flagship missions—they cannot even appoint levelling up directors—and today we see that reach its maximum. There is a rock-bottom allocation for Yorkshire and the Humber, nothing for the cities of Birmingham, Nottingham and Stoke, and nothing for Stonehouse in Plymouth, which is a community in the bottom 0.2% for economic activity, but there is money for the Prime Minister’s constituency and money for areas in the top quartile economically. What on earth were the objective criteria used to make those decisions? How on earth are only half the successful bidders from the poorest 100 communities?

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. The Minister must be honest that, in levelling up, even the winners are losers.

Is not the reality that this “Hunger Games” approach to regional growth creates a huge amount of waste in time and energy? Why will the Government not instead adopt our commitment to end these beauty parades in favour of proper, sustained investment that is targeted at need?

We are to believe that levelling up is to be rebranded as stepping up or gauging up. Let me save the Minister the trouble. It is not levelling up, it is not stepping up and it is not gauging up. It is time’s up.

I would like to correct what the hon. Gentleman suggested about which areas got funding across the country. He mentioned Yorkshire and the Humber, and I would like to clarify that, across rounds 1 and 2 per capita, every region got more than London and the south-east. Of course, the figures can be cut in different ways, but this is funding of £4 billion across the two funds for areas across the country. Combined with what we are doing with our Metro Mayors, it is the biggest transfer of power away from Westminster since world war two. Sixty-five per cent of the north is now represented by a Metro Mayor and, together with significant amounts of funding through other pots of money, we are ensuring that areas such as the north grow and communities get the delivery that they need.

The hon. Gentleman mentioned the Prime Minister’s constituency. I am proud that we are regenerating a town where there is an infantry base. I am comfortable that we are supporting our country and the people who serve in it. He forgot to mention that the Leader of the Opposition had a successful bid in his constituency and that the shadow Secretary of State, the hon. Member for Wigan (Lisa Nandy), got £20 million. He also forgot to mention that Nottingham North got £18 million in round 1 and therefore is benefiting from the Government’s levelling-up programme.

The Department did advise the Labour leader of Worthing Borough Council that we had been unsuccessful in our “connected cultural mile” bid. We should not make this issue partisan. Most people understand that all the bids were worth while.

Will the Minister arrange for departmental officials to talk with those who put in the bids about how some of these important projects could be funded in other ways, rather than waiting for the third round?

My hon. Friend makes a number of important points. Local councils were informed last night that we can improve on that. There were successful and unsuccessful areas, and that is because this levelling-up round was so successful. Some £8 billion-worth of bids were made, so of course there will be unhappy people this morning. However, £2 billion-worth have been successful.

On my hon. Friend’s second point, we will be providing feedback because there will be a third round and we want people to understand why they were not successful in this one.

Scotland’s share of the funding is £177 million out of £2 billion—some 8.5%. That proves that the distribution of the funding is not needs-based at all and therefore, by definition, not levelling up. Around £1.1 billion of the £1.6 billion total levelling-up funding in England has been awarded to areas where there is a Tory MP or a majority of Tory MPs. The Chancellor’s constituency, one of the most affluent in the UK, has been successful; my own constituency of North Ayrshire and Arran, one of the most economically challenged constituencies in the UK, has not been successful in this round.

Let us not forget that the last successful bids, which took place last October, were based on costings at that time. However, labour and material costs have soared. Unless the funds are renewed, the bids cannot be delivered as envisaged and therefore they cannot level up as anticipated at the time. Is it not the case that the whole so-called levelling-up pantomime is more about Tory PR, spin and pork barrel politics than any attempt to reduce inequality?

The answer to that point is absolutely not. The hon. Member forgot to mention that Scotland got £177 million—[Interruption.] The total is £349 million across both funds. The Opposition are making points about party politics, so I would like to point out that 45% of investment across both rounds has been allocated to areas held by Opposition parties.

Culture, drama and theatre are very much among the UK’s great soft power assets. West Worcestershire is in the heart of the midlands, which is why I am thrilled that Malvern Theatres has been awarded nearly £20 million to level up drama opportunities across that part of the west midlands. I say to colleagues who were not successful this time around that we were not successful last time. We took on board the feedback and improved the bid, and now we have been successful. Keep on asking, is what I say to the other bids.

I thank my hon. Friend for her wise advice. Culture is very important and I am very pleased that we are levelling up in her area.

I call the Chair of the Levelling Up, Housing and Communities Committee.

Thank you, Mr Speaker. 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. The Secretary of State agreed that that is what should be done, but the permanent secretary said no progress has been made. Just say it—she wants a photo bid. Come up to Sheffield in South Yorkshire and stand at a bus stop. She will have a long time to wait before one comes along, because once again we have been unsuccessful with the bid we put in.

I am very sorry that the hon. Gentleman has not been successful. There is, of course, a round 3. There is co-ordinated action across Government to ensure that we support and level up. I am sorry he does not feel that £2 billion for levelling up across the country in terms of culture, transport and improving the areas where communities live is not worthwhile. We believe it is.

While I cannot hide my disappointment about today’s announcement with regard to Swindon, it is right to say that we have benefited to the tune of approximately £100 million from previous announcements, including from the future high streets fund and the towns fund. Will my right hon. and learned Friend and officials work closely with me and Swindon Borough Council to ensure that we are able to be successful in round 3, in particular with regard to the projects relating to Health Hydro and the Oasis, which are so important for the future of my town?

I thank my right hon. and learned Friend. I am sure it will be possible to discuss how Swindon can continue to grow. His area has indeed been successful in previous rounds. He mentioned the towns deal, which was allocated nearly £20 million. South Swindon will continue to be well represented—I know he fights for the area on a day-to-day basis.