Levelling Up Fund design is unlawful, says UK campaign group

The UK government faces legal action for allegedly directing public funds towards areas of the country that vote for the ruling Conservative party.

A judicial review claim threatened by the Good Law Project, a campaign group, contends that the design of the £4.8bn Levelling Up Fund is unlawful.

The fund, unveiled in the Budget on March 3, will hand money to local authorities and has ranked them by priority in a way designed to favour seats with Tory MPs or Tory targets, according to the claim.

Several experts have attacked the ranking system, which placed local authority areas in Great Britain in three tiers of need. Rather than relying on the official government index of deprivation, it used a bespoke set of measures such as commuting distance to work, empty housing and productivity levels, which favour rural areas. 

Hence Richmondshire, chancellor Rishi Sunak’s leafy constituency in Yorkshire, and Newark, the home of local government secretary Robert Jenrick, were given top priority. Barnsley and Salford, among the most deprived parts of the country, were ranked as a second-tier priority. Both have Labour councils and MPs. 

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

The fund is supposed to regenerate town centres, improve transport infrastructure, and maintain cultural, heritage and civic assets.

Because top priority places will get £125,000 capacity funding towards making bids to the LUF and are also more likely to succeed, the Good Law Project says the ranking is illegal.

Its letter of claim, sent on March 29, challenges the government on four counts. It alleges that it has breached the Equality Act because there is no evidence of an impact assessment on racial and sexual equality.

Second, it argues it has breached the common law duty of transparency and good administration because it has not published the data behind the rankings.

Third, it says it has acted irrationally because of “flaws in the criteria/methodology”.

Fourth, “decisions were tainted by irrelevant considerations/improper purpose, namely the electoral advantage (or potential electoral advantage) of the Conservative party”.

Jolyon Maugham, the barrister who founded the project, said: “This could just be coincidence, or it could be an attempt to buy votes with public money.”

The claim also references the Towns Fund, a separate £3.6bn pot established ahead of the 2019 general election.

Ministers later admitted choosing 61 of the 101 towns selected to bid for money, including Newark, the 270th most deprived area in the country. Other better-off towns selected by ministers included marginal constituencies such as Cheadle, Milton Keynes and Lewes.

Forty of the first 45 schemes to get their projects approved, announced on March 3, had at least one Conservative MP. 

A 2020 investigation by the National Audit Office found the government “published the list of selected towns without the underlying information to support the selection”.

The cross-party public accounts committee of MPs said ministers made “assumptions” and the lack of transparency led to concerns of “political bias”.

A spokesperson for the Ministry of Housing, Communities and Local Government said: “The £4.8bn Levelling Up Fund is open to all places in Great Britain and will play a vital role in helping to support and regenerate communities.

“The published methodology makes clear the metrics used to identify places judged to be most in need. It would not be appropriate to comment on potential legal action.”