In our policy briefing, launched today, Metro Dynamics have set out the findings of our work as part of the ESRC-MHCLG research project “Improving Public Funding Allocations to Reduce Geographical Inequalities”, focusing in particular on funding allocations under the last Government’s policy of “Levelling Up”.
This research was based on forty-one one-to-one interviews and mini-workshops with local, regional and government policy stakeholders, including leaders and chief executives of councils and combined authorities, policy specialists and practitioners, current civil servants from MHCLG and the Treasury, and former ministers and special advisors.
While there was a strong consensus among policy practioners that the objectives of “Levelling Up” were desirable and necessary, our research highlighted several key barriers to delivering against those objectives;
Quantum and prioritisation. We have heard repeatedly that one of the largest barriers to making progress in reducing geographic disparities was the quantum of funding made available, and the inability of successive ministers and prime ministers to align both the financial and departmental machinery of Government behind Levelling Up; comparisons were frequently made between the £71bn spent annually by Germany on reunification, against the £10.6bn committed to Levelling Up Fund, UKSPF and Towns Fund.
Capacity and local leadership. We found consensus that the widespread diminution of local government’s capacity to deliver over the prior decade resulted in the loss of local initiative, proactive capacity and well-developed project pipelines; one senior local authority figure detailed how their economic development team had contracted from 67 to just six core team members over the last decade.
Overcentralisation. Levelling Up funding was highly centralised, and we found that the resulting system was characterised by bottlenecks where local initiatives must await central approval; one senior civil servant characterised the "painful" process of seeking approval for even modest project adjustments, reflecting the fundamental tension between central accountability and local delivery needs.
An unlearning of best practice in funding design. Practioners highlighted an over-reliance on competitive bidding, fragmentation of funding streams, short term funding windows, unclear eligibility criteria, a politically-driven reliance on visible grant funding, a loss of good practice in private-public expertise, and an over-reliance on capital over revenue spending; it was felt that much of this was a move away from the best practice established by policy development over the preceding forty years.
Responding to the above and based on practitioner input, the policy briefing makes some key recommendations for change, including a place-based secondment programme to boost local capacity, the deployment of “menu” and “prospectus” approaches to consolidate and accelerate project approval, and longer-term certainty around funding streams to support project development. You can read the policy briefing below, while the final report of the wider ESRC-MHCLG project, drawing on parallel workstreams including literature review, international comparators and a citizen engagement workshop, will be launched in April 2025.
You can read the full report here.