Northern regions allocated £21m less of 'Levelling Up' fund than expected

The Community Renewal Fund (CRF) was set up by the government to provide money to community pilot projects between 2021-22 during the transition as EU structural funding was phased out. It’s hoped that successful pilot projects funded by the CRF’s £220m pot will then be able to apply for the UK Government’s Shared Prosperity Fund (SPF) which aims to provide £2.6 billion of new funding by March 2025.

However, analysis by academics from Health Equality North (HEN), the University of Manchester, the National Institute for Health and Care Research (NIHR), and the Applied Research Collaboration Greater Manchester (ARC-GM) has shown that regions in the North have received £21m less than their expected share of the first round of this levelling up funding.

Expected funding for each region in England was calculated from a ‘resilience score’ which the government calculated by looking at productivity, skills, unemployment, population density and household income. It was a calculation of each region’s ability to recover from economic shock.

In the first round of funding, the Yorkshire and Humber region was expected to receive £17.5m based on its resilience score, but only received £12.3m.

Meanwhile, the North East was expected to receive £21.1m based on its resilience score but got only £7.7m from the central government - leaving it short of £13.4m of funding. The North West received £12.1m instead of £14.6m.

The research, published in the journal Regional Studies, Regional Science, argues that if the same allocation methodology were used for the SPF, Northern regions could be underfunded by £250m.

The Labour party recently released their own research which showed how local councils have spent £55m since 2019 on preparing bids to different funding pots.

It’s estimated that £21m has been spent by local authorities on bids for the Community Renewal Fund.

Shadow Levelling Up Secretary, Lisa Nandy said that local leaders are forced to go “cap-in-hand” to Westminster while competing with each other.

“For cash-strapped communities in need of investment, these competitive funding pots are the only game in town, but they mean councils are forced to waste millions of pounds during a cost of living crisis on bids, most of which now lie in a bin in Whitehall,” she said.

“That’s why Labour has called for an end to this Hunger Games-style approach. We will scrap the broken bidding system and undertake the biggest ever transfer of power out of Westminster to make every part of the UK better off.”

Dr Luke Munford, Co-Academic Director at Health Equity North, and Senior Lecturer in Health Economics at the University of Manchester, said: “There are deep-rooted, persistent regional inequalities in health and wealth across England. People in the North live shorter lives and have higher rates of bad health and disability. These inequalities have widened during recent decades and will continue to do so without effective policies put in place.”

The National Audit Office has also raised concerns about the effectiveness of funding awarded by the Department for Levelling Up (DLUHC), saying “the department lacks evidence on whether the billions of pounds of public funding it has awarded… have had the impact intended”.

DLUHC did not provide a comment about the CRF.