The Government’s £4.8bn Levelling Up Fund (LUF) was announced recently as part of the 2020 Spending Review.
In summary, it will provide a source of capital investment in local infrastructure to build on and consolidate prior programmes, such as the Local Growth Fund and Towns Fund.
Open to all Local Authorities
The Fund will be available to regenerate town centres and high streets, upgrade local transport, and invest in cultural and heritage assets.
Up to £20m will be made available for individual project subject to a Bid process. There is also scope for funds of up to £50m for larger high-value transport projects (such as road schemes), which can be submitted by any bidding local authority.
The prospectus explains that Bids will be assessed based on their characteristics of the place; deliverability; strategic fit with local and Fund priorities and whether they represent value for money. The Bids will comprise two parts:
- Part I an overall summary and financial case; and
- Part II detailing strategic link to overall bid and deliverability for each individual project.
The LUF therefore embodies the approach of the Green Book Review, focusing on the needs of individual places and detailing the strategic case for investment.
Capacity funding to help develop bids will be allocated to Councils “most in need of levelling up”. An index has been published alongside the prospectus which classifies local authorities into Category 1, 2 or 3 based on assessment metrics; with Category 1 representing the highest level of identified need.
The definition of these categories has created some controversy, mainly because the metrics used have not been published by the Government to date. Notwithstanding this, those local authorities in the two lower priority categories will still be considered for funding on their merits, and could still be successful if they are of exceptional high quality.
The prospectus sets out the approach for the first round of the fund, which will prioritise bids that can demonstrate investment or begin delivery on the ground in the coming financial year (2021-22).
Local Authorities are recommended to consult with a range of local stakeholders across the full geography of a place in developing their proposed investments for the Fund. They are also only allowed one successful bid for each of their allocated number of bids over the lifecycle of the Fund.
Deadline for bids
To apply for investment from the first round of the LUF, eligible local institutions must submit their bids to the MHCLG by noon on Friday 18 June 2021.
Further guidance and templates for bid submissions, including package bids, will be provided to local authorities shortly. This is critical, as authorities will need more information to inform their decision-taking on this, and whether they deploy their resources to put bids together. Hopefully the guidance will also explain in more detail why they are in the priority groups they are, and what the Government is looking for from the Levelling Up Fund.
The challenge of allocative efficiency
In summary, the announcement of the £4.8bn Levelling Up Fund (LUF) is welcomed. More money is clearly needed to help with the recovery and regeneration of our failing centres and deprived communities. Notwithstanding the criticism of how local authorities have been prioritised by the LUF, it is apparent that the Government is seeking to allocate funds to those towns, high streets and communities most in need. But if you are a local authority that sits outside of Category 1, your bid submission will need to be “exceptional” and of the “highest quality”.
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Our dedicated Town Centre and Economic Regeneration team has considerable experience and a strong track record of unlocking investment and funding to help deliver critical and complex mixed-use development, infrastructure and regeneration projects. For example, we have recently helped a number of our local authority clients with Future High Street and Towns Fund bids totalling over £100m to help deliver a wide range of interventions. If you think you will need help to put together a bid, or are undecided and would just like to discuss the potential options with us, then please get in touch.
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