A great leveller

This article originally appeared in the Municipal Journal.

Despite its clear flaws, the Levelling Up Fund is one of the few funding mechanisms councils can access to provide much needed investment in their places.

Launching this week, a new report from the Association for Public Service Excellence (APSE) and the Centre for Local Economic Studies (CLES) provides a guide for how councils can avoid falling into the trap of developing regeneration initiatives that extract wealth and deliver poor outcomes for people, place and planet, with a toolkit for projects to maximise their positive impacts locally.

A flawed fund

The Levelling Up Fund is one of several competitive bidding pots for local areas designed to “level up” the UK’s highly unequal economy. The first two rounds of the Fund have allocated nearly £4bn to places that want to fund town centre and high street regeneration, to improve transport connections, or to develop cultural, heritage and civic assets.

However, the fund’s ability to deliver against its own stated objectives has frequently come into question.

“time and resources wasted in developing unsuccessful bids”

The competition-style allocation process for funding has meant just one third of round one bids were successful and one fifth in round two, with a lot of time and resources wasted in developing unsuccessful bids. Commentators have also suggested that more funding has been awarded to areas in favour with the current government, and it’s become apparent that some of the UK’s most deprived areas are among those yet to see any funding at all.

The focus on physical regeneration through capital investment limits capacity to support required improvements in local public services, and the limited scale and short-term nature of investments hampers potential to create and sustain long-term change in response to the challenges local areas are facing. The question must then be asked: are the fund’s investments alone able to address the imbalance in our country? Can high rates of poverty and poor health and wellbeing be addressed through investment in capital infrastructure alone?

Round three of the fund is expected to launch soon and some changes to the design and allocation process are anticipated, but the broad parameters are expected to be sustained.

Working within these parameters, local councils can fall into the trap of designing and delivering economic regeneration schemes that deliver sub-optimal outcomes for communities. This model of regeneration – while achieving the desired aesthetic enhancements and brand-new premises in centres – often prioritises profiteering by developers and can result in unnecessary extraction of local wealth. Doing so means they can fail to deliver benefits to the most deprived communities, provide good quality jobs or local public services, and can adversely affect local environments and increase greenhouse gas emissions.

Making lemonade

Despite all this, it is easy to see why councils persist in applying to the fund: it’s one of very few mechanisms they can use to provide investment for regeneration – and after a decade of austerity, the pandemic and in the midst of the cost of living crisis, these investments are much needed.

“maximise the impacts of capital investment and create better outcomes”

There are also an increasing number of local councils across the UK demonstrating the potential to deliver new and improved developments that maximise the impacts of capital investment and create better outcomes for people, place and planet, from Ayrshire, to Salford and Tower Hamlets.

Looking at this picture – and having witnessed the scope for innovation in local economic development and regeneration even in the cases of flawed funding models – we decided to reach out to local authorities across the UK and investigate the ways in which councils are seeking to maximise the socio-economic impact of levelling up funding on their localities. From the outdoor activities projects in the Scottish Borders actively involving local suppliers, to the Welsh leisure and wellbeing hub offering council services on site, we encountered plenty of examples of projects that place benefits to local communities, services, businesses and environment at the forefront.

Partnering with APSE, we took this learning and developed a toolkit for councils to maximise the impact of the Levelling Up Fund for local communities. The toolkit centres around five checks to be applied to projects, with a range of best practice suggestions focused on maximising positive impacts locally. The checks aim to ensure:

• lthe project is working to combat the climate and nature emergencies
• project spend is really delivering local social value
• land and facilities serve a greater purpose for local communities, driven through community engagement
• the project supports increased access to training and employment opportunities, especially for communities not currently accessing them
• the project supports greater involvement of local public services, including in-house council services, locally owned and socially minded enterprises.

“taking the lemons they are handed and using them to make lemonade”

In this project – as in much of our work with local economic development practitioners in councils across the UK – we have been continually reminded of one thing: our local authorities are adept at taking the lemons they are handed and using them to make lemonade for the places they serve.