Government 'recycling' cash between flagship funds


Labour has slammed ministers for ‘announcing then re-announcing the same funding under different names’ after the Government refused to disclose how much of the controversial £3.6bn Towns Fund has been diverted to other cash pots, such as the new Levelling Up Fund (LUF).

The £4.8bn LUF was first announced in November’s Spending Review and is acknowledged to be a successor to the Local Growth Fund (LGF), which was due to provide £12bn up to 2021, including £1bn a year for transport projects.

The prospectus for the LUF states explicitly that it supersedes the £150m pinch point programme for local roads, and encourages English local authorities to submit existing pinch point bids to the new fund instead.

Among hundreds of millions that have been diverted from the Towns Fund is £300m moved to the LUF that had been set aside for a Towns Fund competition, while £175m capital funding for Freeports will be ‘partly’ funded through the Towns Fund.


Communities department MHCLG told Transport Network that £1.28bn has so far been committed from the Towns Fund for Town Deals and £830m awarded from the Future High Streets Fund, while £95m from the Towns Fund for Heritage Action Zones is the responsibility of culture department DCMS.

MHCLG has declined to clarify how much of the original £3.6bn will eventually be awarded through the Towns Fund. However, there appears to be around £1bn in the fund that has neither been allocated or otherwise accounted for.

So far 52 areas have received Town Deals, while MHCLG said the remaining 49 towns of a long list of 101 ‘have submitted proposals and assessment continues’. It told Transport Network: ‘No town has been turned down.’

However, in response to a written parliamentary question from Labour’s shadow local government secretary, Steve Reed, communities minister Eddie Hughes said areas that ‘did not’ get cash from the Towns Fund can bid for the cash within the LUF, casting doubt on his department’s assertion that it is still considering bids.

Steve Reed

Mr Hughes declined to state how much Towns Fund cash has been diverted to the LUF.

Labour has also has pointed out that only £9bn has been handed out through the LGF, and suggested that some of the unspent cash may have been shuffled from one fund to another.

Last week, in response to a question on the issue from Mr Reed another communities department minister, Luke Hall, said ‘the remaining elements relate to’ Department of Transport and Department for Education projects and MHCLG housing programmes. He did not state that these ‘elements’ would see the remaining cash allocated through the LGF.

Mr Reed told Transport Network: ‘These findings prove that the Conservatives are governing by press release not delivering the transformative investment that held-back communities badly need.

‘Recycling money from existing funds will not fool voters. They expect the Conservatives to deliver on their commitment to fix regional inequalities.

‘The public will conclude the Conservatives are trying to con them if they keep announcing then re-announcing the same funding under different names.’

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