In austere times any government funding is to be welcomed and the ‘£2bn’ (actually £930m) announced for local growth fund deals from next year for the 39 LEPS is certainly better than a poke in the eye with a stick.
However, after years of watching Treasury money being recycled more often than Thames tapwater I tend to veer on the sceptical side about just where the cash comes from and how much of it is already in the system. How very unfair of me!
However in this case, ministers make no bones of the fact that the money has been extracted from existing Whitehall budgets and repackaged into the local growth funds funnelled through to the LEPs. In fact they make a point of stressing that these are Whitehall budgets ‘localised’ and a success for localisers like cities minister Greg Clark who has persuaded his ministerial colleagues to part with their cash. Sceptics argue that this is still a bidding round with LEPs having to jump through hoops to access the funding.
To recap: the £2bn announced for next year is part of £6bn earmarked for following years to 2021. Local matchfunding is expected to double the amount and ministers predict 150 roads and 20 stations will be built as a result. Of the £2bn for next year £1.1bn has already been earmarked, mainly for transport projects, leaving £930m. The pot was three times oversubscribed such was the interest. A glance down the list of 39 LEPs shows the top beneficiaries are Greater Manchester with £170m and London with £151m while the rural areas of Cornwall and Cumbria receive £11m and £9m respectively.
I asked Mr Clark in a recent interview whether it made much sense to cut local authority budgets by 30% over four years and then hand back £930m spread over 39 areas. For example Buckinghamshire County Council reckons it needs £366m just to bring its roads up to scratch. The Buckinghamshire Thames Valley LEP received £11m from the local growth fund. He argued that the local growth fund is outside the spending round and unconnected with any reductions in local authority grant funding; in other words it’s sort of new money but money Whitehall was going to spend anyway but not necessarily in this way. Very Sir Humphrey.
