Spending Review 2020: progress on the levelling up agenda
Understand the key takeaways from the Comprehensive Spending Review, focusing on the government’s levelling up agenda to reduce regional disparities across the country.
With the government repeatedly committing to levelling up across all regions, it came as no surprise that this was a key feature within the one-year Comprehensive Spending Review that Chancellor Rishi Sunak announced today.
The speech was very much caveated with the acknowledgement that the public purse is under significant pressure, and that funding continues to be directed to protecting lives and livelihoods in the wake of the ongoing COVID-19 pandemic.
That being said, there were some positive announcements which will go some way to driving growth across all English regions.
On levelling up
- Government announced a £4bn Levelling Up Fund, allowing for investments in local projects of up to £20m with a focus on growth and regeneration in places of need. The fund is cross-departmental sitting between the Ministry for Housing, Communities and Local Government, the Department for Transport and HM Treasury.
- Whilst a welcome fund, the devil will be in the detail, including timelines and criteria for bids. If the fund operates over short timelines and is weighted towards ultra-local projects, it may miss the opportunity to deliver longer-term strategic plans.
- The CBI will continue to call for long-term funding settlements to drive local growth and regeneration, including devolved funding for Mayoral Combined Authorities and Sub-National Transport bodies to deliver strategic plans for connectivity, housing and economic growth, and multi-year settlements for Local Authorities.
On the UK Shared Prosperity Fund
- The UK Shared Prosperity Fund (UKSPF) set to replace EU funding will at least match current EU receipts reaching around £1.5bn a year. This will be welcome news, as well as the fact that investment will be aligned with wider net zero objectives.
- £220m of additional funding has been announced to support local areas transition to the Shared Prosperity Fund. Further clarity is urgently needed on the details of the fund, to ensure there is not a gap in the pipeline of planned programmes/initiatives.
- The CBI will continue to work closely with officials to ensure the business views are represented within the development of the UKSPF. This includes ensuring that the fund aligns with local COVID-19 recovery plans, that allocation processes are streamlined and improved – aligning with existing funds such as the Towns Funds, and finally that the Fund allows for long-term investment and planning.
On the Green Book and the Places for Growth Initiative
- Government announced a reform to the Green Book – the key tool through which government departments assess and decide where to invest. This is much welcomed by the CBI – we have called for this on a number of occasions. This change will see appraisals on investments move beyond simply cost-benefit analysis to a wider assessment, which includes how investments, for example in infrastructure, will align with wider local and regional strategies.
- As well as this, the government announced their Places for Growth initiative, which would see civil servants relocated to ensure they are closer to the communities they serve, as well as a reporting mechanism through which progress on levelling up will be tracked across government. With levelling up a core part of the government’s strategy, understanding how it will be assessed and measured will be vital to its success.
- The CBI will be working closely with government to ensure that interventions to kickstart recovery and level up the country are underpinned by a commitment to empower places. Government must urgently publish the Local Recovery and Devolution White Paper. This paper should set out how the government will deliver more devolution – ensuring 60% of the population is covered by a deal by 2025, and that places have the powers and resources to deliver economic growth and prosperity across all regions.
What next?
The overarching theme from the government’s announcements on this agenda is very much ‘the devil is in the detail’. Within today’s Spending Review, the Chancellor repeatedly stated that more information would be announced in the New Year. The CBI will continue to call for this clarity, which is vital to ensuring businesses can invest in growth and prosperity across the regions.
In the meantime, the CBI will be developing a series of Mayoral Manifestos, setting out regional priorities in advance of upcoming Metro Mayor elections in the West of England, Cambridge and Peterborough, West Midlands, Greater Manchester, Liverpool City Region, West Yorkshire and Tees Valley. Please contact Jim Hubbard if you’d like to get involved.
Read our most recent report, Reviving Regions, which sets out what is needed to ensure places across the country can revive and thrive. Contact Hannah Richmond if you would like to find out more.
Read more on the 2020 Spending Review:
Spending review 2020: what it means for your business