The Conservatives spent only a quarter of the money they allocated to levelling up, according to freedom of information requests that underline how Michael Gove’s flagship regional spending scheme failed to live up to expectations.
The previous government allocated £10.6bn to the three main schemes under the levelling up programme, which provided funding for regeneration projects as diverse as leisure centres and local transport networks.
But answers provided by the government to the local government expert Jack Shaw show it managed to spend only £2.5bn of that money, which experts blame on a mixture of high inflation, bureaucracy and poor decision-making.
Shaw said: “It is clear that short-term, competitive funding is not the most effective way of investing in communities. The Conservatives spent too long requiring local authorities to bid for funding, didn’t get it out on time and changed the rules of the game throughout – making it very difficult for places to invest.”
Boris Johnson, the former prime minister, promised that his levelling up programme would help solve Britain’s longstanding regional inequalities. He put Gove in charge of the scheme, which was designed to secure value for money for the taxpayer by making local authorities bid against each other for pots of money handed out by the central government.
Experts say the scheme was beset with problems from the start, however, including changing the bid criteria and heavy-handed intervention from Whitehall.
Even when the money was allocated, local officials struggled to spend it, thanks in part to rapidly escalating costs. With inflation spiking, local authorities found the money they had been allocated did not cover the cost of the planned programmes, and had to go back to Whitehall for more money or permission to change the scope of the work.
Shaw’s figures show officials found it hardest to spend money from the main levelling up fund, with only £875m of £4.8bn having been spent. Just £1bn of the £3.2bn towns fund was spent, while officials spent £616m of the £2.6bn allocated to the shared prosperity fund, which was meant to replace EU funding.
The figures add to mounting evidence that the entire levelling up agenda has failed to live up to its billing.
The Guardian found last year that new leisure buildings, high street regeneration, museums and public spaces had all been hit by rising costs.
In Halifax, a new swimming pool and leisure centre were put on hold for at least a year, while Preston council had to go back to central government to ask for more money after the costs of refurbishing a museum rose by over £1m.
An analysis by Shaw earlier this year found that fewer than half of the schemes sanctioned under the £3.6bn towns fund were on track to be finished by the end of the year.
Meanwhile a report around the same time by the parliamentary public accounts committee found “absolutely astonishing” levels of delays. Meg Hillier, the chair of the committee at the time, said: “The vast majority of levelling up projects that were successful in early rounds of funding are now being delivered late, with further delays likely baked in.”
Another problem, say experts, was that councils were bidding for money for projects they thought would get approved by central government, rather than projects that were really needed by their local communities. When costs escalated, some say, councils put these projects on the backburner to focus on their true priorities.
Clive Betts, a Labour member of the current public accounts committee, said: “The reality is that the schemes that were accepted were not the ones which tallied with councils’ priorities, but they were designed to hit the priorities of the central government.
“This is the problem with single pots of money which councils have to bid for, and it shows why we need proper long-term strategic funding for local government.”
The Labour government has cancelled the levelling up scheme altogether, rebranding the entire department as the Ministry of Housing, Communities and Local Government.
Ministers have promised to allow local authorities to decide for themselves how to use regeneration funds. Several councils, however, remain financially stretched, with a recent study showing one in four are set to go bankrupt in the next two years without a further cash injection from the central government.
• This article was amended on 16 December 2024. An earlier version said that only £875,000 of £4.8bn from the main levelling up pot had been spent; that should have said £875m. Also officials spent £616m, not £616,000, of the £2.6bn allocated to the shared prosperity fund.
