Government criticised over design of levelling up fund

The methodology for the government’s £4.8bn fund to level up and regenerate areas across Great Britain ignored most indicators of deprivation, according to documents published on Thursday.

The UK’s Labour opposition has attacked the Levelling Up fund as “pork barrel” politics after it ranked some wealthy Conservative voting areas as needier than many ex-mining and steel towns.

They included chancellor Rishi Sunak’s own rural Richmond constituency in North Yorkshire.

The methodology published by the Ministry of Housing, Communities and Local Government on Thursday favoured areas of England with low productivity and where people have long commutes to work — typical characteristics of rural areas. Farming and tourism are the sectors with the lowest productivity.

But critics said the government should have included widely accepted measures of poverty such as its own Index of Multiple Deprivation which takes into account income, levels of crime and health.

Local authorities across Britain can bid for the fund but were placed in three categories of need, with the first more likely to get funding. 

This formula confirms fears that the Conservatives are funnelling money to richer areas and leaving poorer areas to sink.

It included Richmondshire and Newark, the home of local government secretary Robert Jenrick, but not Barnsley or Salford, among the most deprived parts of the country. 

The government has now revealed how it designed the system using a weighted index. It has assigned 50 per cent to the level of unemployment, productivity and skills. A further 25 per cent is assigned to the length of commutes to the nearest town with at least 5,000 jobs. The remainder is assigned to the proportion of empty commercial premises and homes.

Financial Times analysis found that in England 14 places that were wealthier than average were ranked in the most needy category, and all had at least one Conservative MP. 

In Scotland and Wales, the commuting data is not available and so is not used.

The fund is supposed to regenerate town centres, improving local transport infrastructure, and maintaining cultural, heritage and civic assets.

The methodology document says “local transport networks may be limiting local economies” in some places.

“Bids from places in all categories will still be considered for funding on their merits of deliverability, value for money and strategic fit, and could still be successful if they are of high enough quality.”

It adds that ministers approved the metrics and did not seek any changes.

But Nicola Headlam, a former civil servant who worked on levelling up, questioned why the government had used new methodology. “The Index of Multiple Deprivation and its statistical geography were built for the task.”

Steve Reed, Labour’s shadow communities and local government secretary, said:
“The government cannot claim to be fixing regional inequalities when they have removed deprivation as a factor in allocating this funding.

“This formula confirms fears that the Conservatives are funnelling money to richer areas and leaving poorer areas to sink.”

Parliament’s Public Accounts committee has already found that another government programme, the Towns Fund, used “vague” criteria and said decisions to award some places cash seemed politically motivated.

Additional reporting by Jim Pickard in London