Is UK plan to regenerate ‘leftover’ areas in trouble?

A 1980s leisure center in the market town of Halifax, northern England, has been boarded up and surrounded by a steel fence.

There should be construction activity at the West Yorkshire site after money was won from the Government’s “equalisation” fund to build a new gym and swimming pool, but high inflation will add more than £4m to the £28m cost of the project, local advice. reluctantly put the plan on hold.

“It’s a terrible decision to make, but we’re not the only council to be in this situation,” said Jane Scullion, acting leader of Calderdale Council, which covers Halifax. “We couldn’t write a blank check.”

The situation in Calderdale shows that the government is increasingly struggling to deliver on the Conservatives’ 2019 election promise to catch up on “left behind” areas and reduce the UK’s regional disparities.

It is not just inflation that is undermining projects such as the North Bridge Leisure Center in Halifax. The allocation of billions of pounds worth of central government funding to community schemes has slowed after the political chaos that led to the UK having three prime ministers in less than two months.

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Local leaders are increasingly questioning how much of the equalization program will ever be implemented. Chancellor Jeremy Hunt’s fall statement on Thursday is expected to result in a reduction in capital spending on infrastructure projects, on which a large part of the level rise depends.

Scullion said part of the problem was inadvertently caused by the government’s “rush” to implement plans, including the Halifax Leisure Centre, as it wanted to provide communities with evidence of progress before the next election.

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The project received £12m of funding from the £4.8bn equalization fund. It was one of nearly 400 programs that received support from that bank, and four similar programs: the City Fundthe Future High Streets Fundthe UK Community Regeneration Fund and the Obtaining a construction fund.

But such projects face multiple headwinds as inflation hits a 40-year high, supply chains seize and hundreds of local authorities compete for limited resources in the construction industry. “So we were up against other places, which also affected the cost,” Scallion said.

Éssaki Híd Leisure Centre: the local council reluctantly put the renovation plans on hold
North Bridge leisure centre: the local council reluctantly put the renovation plans on hold © Jon Super/FT

Calderdale Council is contacting civil servants over the future of the Halifax leisure centre. But after promoting three secretaries to different levels in just four months, two Whitehall officials said the Department for Upgrading, Housing and Communities was in “chaos”.

Just a little more than a third Leveling Up Fund was distributed, the second round of distributions is running months late. Jack Shaw, a local government expert at Cambridge University’s Bennett Institute of Public Policy, said only £243 million, or 5 per cent, had been spent, according to figures obtained through a Freedom of Information request.

“There are just a lot of problems with getting the money out,” said one government official, adding that the leveling department has fallen behind in spending the budget.

The ministry said it remains “strongly committed” to the projects supported in the first round of the Leveling Up Fund and will soon distribute the second tranche. “We understand the pressures on councils and will work closely with them to ensure vital public services are protected and projects are delivered,” he added.

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The return of Michael Gove as secretary last month – four months after he was sacked by then-prime minister Boris Johnson – raised hopes in some quarters that the policy could be restored.

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“Michael Gove’s return is a good thing,” said Linda Taylor, leader of Cornwall Council. “He is aware of the need to streamline how the government delivers resources to local areas.”

He added that Cornwall was delighted to receive £99m from the Town Fund and Future High Streets Fund, £14.3m from the Getting Building Fund and £132m over three years from UK Shared Prosperity Fund — replacement of EU development funds after Brexit.

However, he admitted that apart from a small amount of seed funding, most of the money had still not arrived and that Cornwall was waiting for Gove’s department to sign off on its investment plan to access its share of Britain’s Shared Prosperity Fund.

Taylor said the funding could have a “pioneering” impact on the county, which is looking to develop new industries, including space exploration and the mining of critical minerals such as lithium and tungsten.

Constable Linda Taylor, Chief Executive of Cornwall Council
Linda Taylor, chief executive of Cornwall Council, admitted that much of the money had still not arrived © Cornwall Council

Yet with so many councils bidding for local development projects, business groups have warned that the equalization program does not guarantee efforts to secure skilled jobs, which are essential for serious attempts to reduce regional disparities.

Mark Bretton, national business chairman of Local Enterprise Partnerships, which was launched in 2011 to help co-ordinate local government and business development, said many of the application processes were too “fragmented”.

“That’s not how a business would run its world,” he added. “Having 10 people bid on the same thing 10 times is not appropriate.”

The government’s equalization funds are just one of the “quick wins” in the wider agenda set out in Gove’s 330-page white paper on tackling regional inequality eight months ago.

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It outlined wide disparities in income, health, transport infrastructure and research and development spending across the UK, resulting in 12 policy ‘missions’ aimed at focusing the minds of decision-makers.

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Some progress has been made, with elected mayors in the East Midlands and North Yorkshire scheduled to win this summer.

The mayors of Greater Manchester and the West Midlands are hoping to strengthen devolution measures in the coming months. Cornwall expects to sign a new mayoral contract in 2023.

But plans for 12 senior directors across the UK’s countries and regions have stalled after hundreds of candidates came forward last spring but none were appointed.

Andrew Carter, head of the Center for Cities think tank, which works on urban regeneration, said the level-up initiative was now mired in a “general sense of delay” after a summer of turmoil in Whitehall.

“I am still in favor of leveling off, but although the government is still rhetorically committed, there has been no real progress,” he added. “We need Gove now – and sooner rather than later – to say what parts of the agenda he will really prioritize.”

While it waits for the all-clear, local government is preparing for another cut in Hunt’s Autumn Statement, following spending cuts introduced by then chancellor George Osborne in the 2010s.

Even some of the architects of the equalization schedule are beginning to doubt that it can really be done. Rachel Wolf, co-author of the 2019 Tory manifesto, said the initiative faced “big challenges” ahead of the next election.

“The only big option for the government is to pull all the non-financial tools,” he added, including devolution and moving more R&D funding away from the south-east of England, as he promised.

“But the truth is, it’s going to be very difficult now to tell those voters who voted Conservative for the first time in 2019 that their lives have improved because of it,” Wolf said.