A central theme of the 2019 basic election and flagship programme of the Johnson premiership, the ‘Levelling Up’ agenda was proposed as a measure to redress social and financial inequalities throughout the UK via strategic and measured funding. To profit from the agenda, native authorities could be inspired to submit bids to obtain pots of cash for public tasks, together with (however not restricted to):
- Improved and new transportation hyperlinks, together with highways, smaller roads, biking and strolling routes
- Improvement of extra inexpensive housing and regeneration of present properties, notably for housing associations and lodging for the retired and aged
- Enhancements to culturally vital websites, equivalent to listed buildings, artwork galleries and historic websites
- Provision of grownup up-skilling programmes to offer high-skilled candidates
- Retrofit and decarbonisation works to enhance power effectivity consistent with the federal government’s Internet Zero by 2050 goal.
Moreover, the Levelling Up agenda presupposed to introduce a plethora of alternatives within the public sector procurement. Enhancements to present infrastructure translated to a higher want for companies from non-public corporations with a purpose to ship on commitments resulting in a ‘trickle-down’ of public funds which might additional profit disadvantaged and deprived areas.
Practically 4 years on from the final election and a 12 months after the publication of a authorities white paper, it’s applicable to evaluate the adjustments and results Levelling Up has made on buying authorities and general procurement spend. Figuring out whether or not substantial adjustments have been made to practices shall be essential in adapting to future instructions of public procurement.
With 14 years’ expertise and over 7,000 public sector tenders accomplished on behalf of purchasers, Govt Compass are nicely positioned to offer evaluation of the Levelling Up agenda and its initiatives.
Offering an summary
The phrase ‘levelling up’ has an extended historical past inside UK politics – nonetheless, it first took its present guise following the discharge of a central authorities white paper in 2017 titled ‘Unlocking Expertise, Filling Potential.’ It was right here the place the phrase was initially deployed – ‘now we have a nationwide mission to degree up alternative throughout this nation and construct a fairer society.’
In his first speech as Prime Minister, Boris Johnson outlined levelling up as ‘closing the chance hole’ between discrete areas of the UK. Lower than six months later, it grew to become an important platform of the Conservative Celebration manifesto within the basic election, with levelling up talked about as a part of measures to shut abilities gaps, create a nationwide abilities fund and launch main infrastructure and transport tasks.
Following the Conservatives’ victory within the basic election, the official Levelling Up Fund (LUF) was established within the winter of 2020, as a part of the Treasury’s annual spending evaluation. To supply a framework for potential candidates, the LUF organised ‘funding themes’ for alternatives, consisting of:
- Transport investments: together with public transport, energetic journey, repairs to bridges and roads, main structural upkeep and accessibility enhancements, with a goal to minimise carbon emissions, enhance air high quality, scale back congestion and assist financial progress.
- Regeneration and city centre funding: supplementing the City Offers Fund, which supplies qualifying cities with as much as £25 million for regeneration and infrastructure. Funding is directed in the direction of upgrading dated infrastructure, growing brownfield websites and bettering neighborhood areas in cities and metropolis centres.
- Cultural funding: involving the upkeep, regeneration and repurposing of museums, customer points of interest and heritage belongings, thereby supporting native and nationwide arts, cultural areas and areas with a robust customer financial system.
Inexperienced Paper
As these skilled inside the public procurement sector will undoubtedly know, the incoming Procurement Invoice is about to streamline and modernise procurement laws. In December 2021, the central authorities launched the Inexperienced Paper, a response to session from stakeholders throughout the procurement panorama. The Inexperienced Paper briefly talked about Levelling Up as a chance to additional implement social worth inside procurement by ‘encouraging contracting authorities to present extra consideration to social worth when procuring public contracts.’
Levelling Up Prospectus
In March 2021, the Division of Levelling Up, Housing and Communities (DLUHC) launched a prospectus which outlines recommendation and steerage for potential bidding authorities, together with allocating a minimal of 9% of funding for Scotland, 5% for Wales and three% for Northern Eire. Additional steerage consisted of the next:
- How funding shall be focused in the direction of areas most in want throughout the UK, measured by an Index of Precedence Locations which considers the necessity for financial progress and restoration, improved transport connectivity and regeneration.
- How the LUF Supply Mannequin shall be managed, together with related central authorities authorities equivalent to HM Treasury, DLUHC and the Division for Transport.
- How native authorities ought to assemble proposals by comprehensively contemplating neighborhood wants, the dimensions of the bid and potential joint submissions with different native authorities.
- How bids will in the end be assessed based mostly on 4 important standards – traits of native areas, general deliverability, strategic alignment with native and LUF priorities and financial worth to the world.
Notable initiatives
A complete of £4.8 billion was allotted throughout three rounds of the LUF, divided within the following method:
| Spherical 1 | £1.7 billion allotted to 105 tasks throughout the UK |
| Spherical 2 | £2.1 billion allotted to 111 tasks throughout the UK |
| Spherical 3 | £1 billion allotted, with the bidding window for tasks presently anticipated to open in late April or Could |
Native authorities have been permitted to submit one bid for each MP constituency inside their administrative boundaries, for a most of £20 million per mission; the one exceptions have been for cross-local authority bids (£20 million per authority) and ‘massive transport schemes’ (as much as £50 million). To qualify for consideration, authorities have been required to offer a minimal of 10% funding to match contributions from the LUF.
Over the course of Spherical 1 and Spherical 2, notable tasks and initiatives which have acquired funding from the LUF embrace:
| Location and Area | Venture title | Description | Funding quantity |
| Barnsley, Yorkshire and The Humber | City centre | New outside exercise park, revamped youth centre, new music facility for younger folks and additional improvement of civic arts centre | £10,243,422 |
| Gwynedd, Wales | Regeneration | Improve to strolling and biking routes for Nationwide Slate Museum and Neuadd Ogwen arts centre | £18,830,189 |
| Inverclyde, Scotland | Greenock | Overhaul of A78 twin carriageway to reconnect and remodel Greenock city centre | £19,390,000 |
| Copeland, North West | Industrial Options Hub | Funding to drive industrial improvement | £20,000,000 |
| Derbyshire, East Midlands | South Derby Progress Zone and Infinity Backyard Village | Growing a brand new junction on the A50 to offer connections to East Midlands Freeport, and the creation of a brand new hyperlink highway from the junction into the Infinity Backyard Village and the Rolls Royce Manufacturing unit | £49,597,972 |
| Newcastle-upon-Tyne, North East | Grainger Market, Previous Eldon Sq. and Blacket Road (Regeneration) | Securing the way forward for two of town’s most iconic and treasured cultural belongings whereas bettering the surroundings and connectivity to town centre | £20,000,000 |
| Thanet, South East | Ramsgate Future | Supporting financial progress via new alternatives in The Royal Harbour and creating a brand new Inexperienced Port | £19,840,000 |
| Wolverhampton, West Midlands | Wolverhampton Metropolis Studying Quarter | Constructing a high-quality studying house for A-level and better schooling lessons, serving 45,000 college students and seven,500 apprenticeships | £20,000,000 |
As evidenced, the LUF was profitable in figuring out and awarding funding throughout a variety of geographic and thematic bids. Total, £670 million was award to bettering transport, £821 million to regeneration/city centre investments and practically £600 million to the restoration and upkeep of cultural heritage websites and belongings.
Challenges to distribution
Geographic inequality
Though the vast majority of funding has been distributed away from Larger London and the South East in accordance with Levelling Up targets, there has nonetheless been a marked asymmetry within the geographic distribution of awarded LUF tasks.
As evidenced above, extra disadvantaged areas of the nation – such because the North East and Northern Eire, the 2 poorest areas of the UK by GDP and median annual wage – acquired much less funding than Larger London and the South East, the 2 most prosperous areas in each classes. Nevertheless, analysing complete funding per capita in every area generates completely different perception:
Total, LUF funding favours extra disadvantaged areas of the UK, with Wales (£104) approaching prime adopted by the North West (£80) and North East (£78). London and the South East obtain the least quantity of funding per head, at £24 and £39 respectively. Nevertheless, a better scrutiny of funds demonstrates how little the extremely touted £4.8 billion fund reaches when utilized to your complete inhabitants.
Gradual launch of funds
Regardless of the formidable plans and arduous bidding course of, gaps, challenges and delays have emerged within the distribution of Levelling Up funding. For instance, a 2022 report from Northumbria College teachers recognized that solely 3% of the £4.8 billion in complete funding had been launched to the profitable bidders following Spherical 1 funding. On 28 March, Shadow Secretary of State for DLUHC Lisa Nandy claimed that simply 8% of complete funding had been spent, regardless of over 80% of funds being formally allotted and all profitable Spherical 2 bidders being notified. In keeping with a clause within the LUF, all funding should be spent by 31 March 2025, which means the clock is winding down.
Oversubscribed or below resourced?
The central authorities has but to publish any unsuccessful bids for Spherical 1 or 2 – nonetheless, the variety of submitted bids will be simply searchable. Throughout the UK, solely 21% of submitted tasks acquired funding – 111 of 525 tasks in complete. From this, the North of England solely acquired 38% of requested funding from Spherical 1 – £520 million from £1.36 billion.
In one other important blow to the mission, funding to assist the Levelling Up agenda is anticipated to be value £560 million lower than the unique funds because of the results of inflation – £340 million misplaced from the LUF and £220 million from the Shared Prosperity Fund, an initiative meant to assist native funding by March 2025.
Total affect
Though LUF funding and the Levelling Up agenda have but to be accomplished, the general affect on public procurement has been negligible. That is because of the measurement of the agenda, which is inadequate to fulfill neither the funding wants of all native authorities nor per capita spend wanted to make a tangible affect. With £379 billion spent on public procurement through the 2021–22 monetary 12 months, a 7% enhance from the earlier 12 months, the LUF represents simply 1.2% of annual procurement spend. Moreover, as illustrated within the earlier part, complete spend per capita over Rounds 1 and a couple of interprets to between £24 (Larger London) and £104 (Wales) per head – hardly sufficient to make the ‘transformative change’ touted by the central authorities.
Nevertheless, funds cuts to sub-central authorities up to now decade are additionally responsible for the unrealistic expectation of Levelling Up’s affect on public procurement and subsequent ‘trickle-down’ alternatives for personal sector companies. For instance, annual authorities funding to councils and native authorities has fallen from £41 billion to £26 billion during the last decade.
Whereas the north of England skilled a mean of £346 in funding cuts per capita within the decade previous 2018–19, Levelling Up funding interprets to £66 per head in Yorkshire & The Humber, £80 within the North West and £78 within the North East. Lastly, with solely 8% of complete LUF funding spent thus far, Labour estimates complete funding wouldn’t be delivered till 2048, evidencing a definite lack of speedy affect to disadvantaged areas along with a scarcity of procurement alternatives promised by the central authorities as a part of numerous tasks.
Future instructions
Because the third and ultimate spherical of LUF funding is anticipated to open inside the month, potential bidders shall be eager to know if future alternatives shall be generated as a part of the central authorities’s Levelling Up agenda. With roughly £1 billion remaining in funding, this interprets to between 50–70 tasks chosen for funding based mostly on present estimates. Nevertheless, because of the observe file in releasing funding and general worth of contracts, potential suppliers shouldn’t depend on Levelling Up tasks to ship transformative change or a gentle stream of income to assist enterprise capabilities.
