John Healey Labour MP for Wentworth and Dearne in South Yorkshire, said towns in his constituency had lost out on funding which had instead been directed to less deprived areas.
A spokesman for the government department responsible for the Towns Fund dismissed the MP’s claims as “misleading” and insisted money was being distributed fairly.
Mr Healey said: “My research shows that the Government’s claim it wants to level up the country is a lie and a sham. Levelling up has to mean giving extra help and opportunities to people and areas that need them most.
“Ministers are not doing that and they won’t explain why. Their murky decision-making does not add up or stand up to scrutiny.”
The £3.6 billion Towns Fund was announced by the Government in 2019 to support an initial 101 town deals across England. When Chancellor Rishi Sunak announced 45 areas to get a combined £1 billion in funding in this year’s budget Labour accused the Government of directing spending to a majority of areas with Conservative MPs.
Towns Fund decision-making involved Government officials ranking 541 towns for need and growth potential. Those ranked highest priority were invited to bid for money but ministers were allowed to use their discretion on selecting the other areas.
Mr Healey has now questioned why a number of towns were denied support while less deprived areas in the region benefited.
He said Thurnscoe, Barnsley, Mexborough, Bolton-on-Dearne, Rawmarsh and Wath-upon-Dearne were all ranked higher than towns invited to bid, including Whitby, Shipley, Morley, Stocksbridge and Todmorden.
Mr Healey’s Wentworth & Dearne constituency - which includes Thurnscoe, Bolton-on-Dearne, Rawmarsh and Wath - is the 85th most deprived constituency in the country while Stocksbridge is in the 340th, Morley the 305th, Shipley 294th, Todmorden 258th and Whitby 154th.
The MP has asked a series of parliamentary questions into the selection of lower priority towns over higher priority, including querying why only 16 towns in Yorkshire and the Humber were selected to bid when Government officials recommended 19. He has also questioned why ministers selected three more towns in both the South East and the South West than officials recommended.
Asked last month specifically why four lower priority areas in Yorkshire were invited to bid, Luke Hall, Minister for Local Government, responded: “Ministers used their judgment and local knowledge to select those in the medium and lower priority groups.
“It was appropriate that ministers made the selection rather than officials, due to the need for qualitative judgement and accountability for decision-making.”
Mr Healey branded the parliamentary response as “totally unacceptable” but the Ministry of Housing, Communities and Local Government (MHCLG) rejected the MP’s stance and insisted distribution of funding has been fair.
A spokesperson said: “These claims are misleading. We’re supporting all areas of the country to level up by providing billions of pounds of new funding that will have a real impact on people’s daily lives and improve their services.
“The selection process for the Towns Fund is comprehensive, robust and fair, based on factors including income deprivation, skills, productivity and investment opportunities. All towns chosen are in the more deprived areas in the UK.
“Investment in these towns will galvanise businesses and communities across the country, boosting local economies and improving the lives of people in their areas.”
The MHCLG said proposals are assessed by officials – not ministers – in the order they are submitted and offers are based solely on the strength of the proposals assessed by officials at the department. Town Deal funding is subsequently given directly to the relevant council.
The department said the Towns Fund is central to Government’s ambition to level up the country by creating jobs and building stronger and more resilient local economies and communities in the long-term.