Baroness Hilary Armstrong heads up the House of Lords Public Services Committee, set up last year to examine how to reform public services so that they work more effectively.
Recognising the intertwined nature of strong public services and delivering on levelling up, the former minister said it would be impossible to achieve any kind of levelling up with fixing the issue of local government funding.
And her committee is midway through an inquiry into finding out what levelling up actually means.
“We recognise the importance of public services but also of how the inequalities in our society, the lack of opportunity for some groups in our society, and the vulnerability of other groups because of longer term issues that were really exposed by the pandemic,” Labour peer Baroness Armstrong said.
And she said people were telling her during the course of the inquiry: “We think this levelling up agenda is really important, it could help address some of these inequalities that made us vulnerable, make groups vulnerable, during the pandemic.”
Baroness Armstrong said after hearing evidence from experts that: “What we want to do is come out and say to Government, these are the things that really matter, and we want to see these things addressed and measured so that we really can find out whether what you've been doing works in terms of levelling up.”
But she said the issue the Government faced was that it had so far been “opaque” over the allocations of funding and resources, and therefore what it hoped to achieve.
“[Levelling up] is only difficult to measure if you're not clear about what you're trying to do,” she said.
“And that is our problem, but the Government has taken a more opaque set of criteria to agree distribution of money to tackle levelling up and that means it's much more difficult to identify what is it that they are tackling, what is it that they're trying to change and level up.
“And how do we hold them accountable to that, when they are using very opaque criteria?”
There has been pushback from some Tory MPs over levelling up being focussed on the North of England, and Baroness Armstrong said this presented tension for the Government too.
“I think that it's a really difficult thing,” she said, saying that “on one level” the Government was focussed on closing the North/South divide.
“But then their core home counties support rails against that, as they did over planning, and the Government shifts again.
“It is very difficult because I know that some of the poorest communities are in London, but London is the capital city, and I certainly know that for the public in the North this is about ‘London gets everything and we get nout’.”
She added: “What we need are thriving communities with their own personality, all the way through the country.”
While for many Conservative MPs, when asked what levelling up means, they will point to an equality of opportunity - so that a child brought up in Bradford has the same chances as one from Buckinghamshire.
But Baroness Armstrong said we “haven't heard much of that from the Government”.
She said: “From the Government it's been mainly projects and infrastructure, town centre development, economic development now.
“All of our people are saying economic development is important, but we had a very interesting session where people talked about what is it that prevents people in poorer communities getting decent jobs and what is becoming clear is that the mainstream public services have a real input into that.”
Meanwhile, the Government released the methodology for its levelling up fund late on Thursday night, a week after the Chancellor faced criticism for Richmondshire, which contains his own constituency, being placed in the top priority group for funding ahead of places such as Barnsley.
Baroness Armstrong was a Government minister when the Index of Multiple Deprivation was developed, which has not been used for the priority list with the Government instead focusing on areas with low productivity and where people have long commutes to work.
But she said if the Government was going to use indicators such as investment in public services, it makes sense that more affluent places which do not need the extra support would come out on top.
“If you look at the amount spent on public services in places like Richmond, and therefore, it was thought that should be topped up, of course it's less because, in allocating money at the moment, on national criteria, you take into account need.”
It is for this reason local authority funding should be of a key concern, she said, pointing to councils and health authorities as often the last resort for those in need.
She said: “A lot of these problems, you can't solve them in four years, and we need to be clear with people about what we're doing that will make an effect in the long term and what in the short term.”
And she added: “We need to know what decisions are fueling the Government funding program. We need clear criteria, and we don't have that at the moment.
“And it's therefore much more difficult to say what the public money spent has actually achieved, and that is a very bad step in British society in the governance of our country.
“And we will be saying, I have no doubt, that Government needs to be clear around how it is spending the money and that need has to be at the centre of that.”