Town halls in the North East have spent £2.1m of public money on consultants to help them bid against each other for money from the flagship £4.8bn Levelling Up Fund.
An investigation by The Northern Agenda politics newsletter lays bare the absurdity of the country’s ‘begging bowl’ funding culture as local authorities spend as much as £1.3m each on outside experts to improve their bids for regeneration cash. At least £23.4m has been paid by councils across the country to consultants, with £2.1m paid out by leaders in the North East, despite many areas being among the poorest in the country.
The majority of the money spent on consultants did not even result in successful bids, Freedom of Information Act requests sent to local authorities reveal, including £2.69m on “doomed” round two bids which were never going to succeed due to councils having already received money in round one.
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County Durham spent £1.3m on consultants, more than any other local authority in Great Britain, though that led to two successful bids. Sunderland spent the next most of any council in our region at £165,413. That’s followed by Northumberland (£141,522), Newcastle upon Tyne (£134,612), Darlington (£116,385), North Tyneside (£78,351), Gateshead (£69,652), and Hartlepool (£50,000). South Tyneside also used contractors in its bids, but withheld how much it spent.
The Levelling Up Fund was launched by Boris Johnson in 2020 with the aim of investing government money into local infrastructure to support economic recovery. But the bidding process has been heavily criticised, with some likening it to a “beauty pageant” and a “begging bowl culture”.
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Freedom of Information Act requests were sent to 389 local authorities across Great Britain, 334 of which responded. A total of 283 confirmed that they made a combined total of 532 bids for £9.18bn worth of funding, only £2.94 billion of which was awarded.
Lisa Nandy MP, Shadow Levelling Up Secretary, said: “This investigation by the Northern Agenda exposes the absurdity of the Government’s Hunger Games-style bidding system. Communities have to compete with one another for permission to do what will work for them, with councils forced to spend millions of pounds in the middle of a cost of living crisis in the process.
“Labour will put an end to this broken system. Through our Take Back Control Act we will undertake the biggest ever transfer of power out of Westminster, putting communities in control of their own destiny and giving local leaders the tools and backing to drive growth in their local economies, without having to go cap-in-hand to Whitehall.”
Asked about Durham County Council's spend on consultants, Amy Harhoff, the authority’s corporate director of regeneration, economy and growth, said: “Levelling up proposals and priorities across the county were developed in partnership with communities, local members, local MPs, and the private sector.
“County Durham is one of the largest local authorities in the country and, due to the scale of work required to develop complex projects and programmes across the county’s five constituency areas, like many local authorities we also invested in additional capacity to support the process.
"Our aim in making this investment was to ensure our submissions met the government’s bidding requirements and gave the best possible case for investment for our county.
“County Durham proposals included five large and diverse bids at the maximum value available, each consisting of a number of large scale projects. Like many areas across the country, we were deeply disappointed by the outcome of the round two levelling up announcement.
"However, the business cases and detailed proposals that were developed will now be used to make the case as part of other suitable future funding opportunities and as a council we will be actively pursuing those.”
Critics in the North say the poorest parts of the country most in need of levelling up have the least capacity to bid for funding because they’ve been hit hardest by austerity cuts in the last 13 years. The only way to level the playing field, many believe, is to better fund local government and ensure the Levelling Up formulas allocate money in a way that better matches the most deprived parts of the country.
Professor Andy Westwood, a former political advisor and civil servant who is now professor of government practice at The University of Manchester, said: “There’s plenty of evidence out there about the politicisation of various levelling up funds and towns funds before them selecting preferred schemes/places or rigging eligibility.
“So instead of direct allocation, Ministers have much preferred a system/culture that generates ‘good’ political press releases in the areas that they want. It’s good old-fashioned pork barrel politics and also used to threaten/manage discipline amongst MPs quite frequently too.
“But it’s not just the process itself that’s a problem - it’s the centrality of performance vs delivery politics, which is very Boris Johnson. So there are lots of visits/press releases and sound bites about £20m here or £30m there and it always seems a lot - and many of the schemes/projects are good and popular - and it looks like action and commitment. But it isn’t really.”
The failures of the current system have been criticised by all sides, including by the Government itself in the Levelling Up White Paper published a year ago. Levelling Up Secretary Michael Gove says his department is reviewing the current bidding process and whether it can be streamlined.
Local authorities deemed to be the most in need of Levelling Up funding were awarded a one off payment of £125,000 capacity funding in order to help support their bids. However, many areas didn’t meet this criteria, and those that did often spent far more than they were awarded. A total of 101 of the 282 local authorities who responded to our FOI and made bids to the Levelling Up Fund were in the highest category.
A Department for Levelling Up, Housing and Communities spokesperson said: “The use of consultants is a decision for individual councils – we provide clear, straightforward guidance to support those applying for the Levelling Up Fund. However, we recognise there are costs associated with bids which is why across both rounds we provided more than £20 million to help councils develop bids.”
