Budget 2021: what does it mean for regions and levelling up?

Whilst the words levelling up were sprinkled throughout the budget announcements further details on devolution, clusters and Local Enterprise Partnerships will have to wait until the publication of the Levelling Up White Paper expected later this year. However, the Chancellor did announce an additional £8.7bn per year to the devolved administrations through the Barnett formula, the highest annual funding settlements since devolution in 1998.   

A much-needed boost to the regions’ high streets was announced through a new temporary business rates relief in England for retail, hospitality and leisure properties for 2022-23, worth almost £1.7bn. However, it’s not the fundamental reform businesses have been calling for. Over 90% of retail, hospitality and leisure businesses will receive at least 50% off their business rates bills in 2022-23. Tax reliefs for museums, galleries, theatres and orchestras will further support the cultural life of towns and cities across the UK. 

The importance of community assets and spaces was also confirmed with the announcement of the first 21 projects to benefit from the £150m Community Ownership Fund as well as a £9m Levelling Up Parks Fund creating more than 100 new parks to ensure access to green space in urban areas.  

A commitment to the continued regional expansion of the British Business Bank (BBB), which played an essential role supporting businesses of all sizes throughout the pandemic, is welcome news as businesses go for growth and work with the government to level up the UK. 

What was delivered 

• The UK Shared Prosperity Fund (UKSPF) was launched, worth £2.6bn over the next three years. It is the successor to the EU Structural Fund programme. The UKSPF will rise to £1.5bn a year by 2024-25. We are still awaiting publication of the prospectus. 
• Affordable Homes Programme will deliver up to 180,000 homes by 2028-29, worth £11.5bn with 65% of the funding for delivery of homes outside London. 
• Recognising the British Business Bank’s (BBB) dedicated Regional Funds, the government has committed £1.6bn to a next generation of funds. The BBB will expand its funds to cover the North East and South West of England. New regional funds will be set up in Scotland (£150m) and Wales (£130m), and build on its existing programmes in Northern Ireland (£70m).  
• £5.7bn of investment over five years in eight City regions, including West Yorkshire, Greater Manchester, Liverpool City Region and the Tees Valley. This is an increase from an initial £4.2bn proposed through City Region Sustainable Transport Settlements. 
• £1.2bn new funding for bus transformation deals to deliver London-style improvements in fares, services and infrastructure and a further £355mn new funding for zero emission buses. Including a fully prioritised bus route between Bristol and Bath and A61 improvements for buses, between Leeds and Wakefield. 
• £1.7bn worth of projects to upgrade local infrastructure through the first allocation of funds from the £4.8bn Levelling Up Fund including, six dualling and upgrade schemes for the A47 and the Lower Thames Crossing, which is described as the largest scheme in a generation. As well as tackling delays to major projects, such as Lower Thames Crossing and upgrades to the Trans Pennine Route. 

What to look out for in the Levelling Up White Paper? 

• Local Enterprise Partnerships, Regional Powerhouses and Strategic Transport Bodies were looking for certainty over their future role and funding allocations in the Budget but will have to wait. 
• A commitment to business led clusters as a means to drive economic growth. Alongside providing support to deliver catapult quarters as a means to drive collaborative innovation activities. 
• Clarity on English devolution, including potential County deals and the role of local government. 

Next steps  

The CBI will be responding to the upcoming Levelling Up White Paper, as well as working closely with all the Mayoral Combined Authorities as they shape their priorities following these new announcements. If you would like to get involved, please contact Nicky Williams.