It has taken less than a year for the Labour Government to follow the familiar pattern in the UK of government creating centrally-distributed funds to drive regeneration and combat regional inequality.
At the start of March, deputy prime minister Angela Rayner announced the new £1.5bn Plan for Neighbourhoods. Since the late 1970s there have been more than 60 different funds designed to increase growth or reduce inequality at the local or regional level. The vast majority have produced limited results at best. Can this one be different?
There are some encouraging signs that the Plan for Neighbourhoods has learned from the mistakes of the past. It is meant to be modelled on the New Deal or Communities programme from the 2000s, one of the more successful of the 60+ previous attempts at government-led regeneration.
The Plan for Neighbourhoods will distribute £20m over a nine-year period to 75 different areas across the country. Each area will have a ‘Neighbourhood Board', made up of residents and other local stakeholders who will decide how to spend the funds. The idea is to ensure funding was secure over time and deployed holistically to cover the specific needs of an area.
The Plan has some obvious advantages to the approach that dominated the distribution of levelling up funds. The ‘poverty parade' bidding culture has been rejected and the restrictive parameters around how funds could be used have been relaxed.
There is a prescribed list of activities from which Neighbourhood Boards are asked to select how they will spend their money. But the list is relatively long and the categories broad, with Neighbourhood Boards also able to propose different activities. This is different from the specific, narrow limitations of the £4.8bn Levelling Up Fund, for example.
In addition, there has also been an acknowledgement that using funds effectively takes time and money, with funds set aside to enable planning for delivery scheduled to start in 2026.
However, while it is clear the Government has listened to what local authorities and others involved in levelling up have said, and attempted to learn from what has worked, the Plan for Neighbourhoods also contains some challenges.
The first is financial. On average, each of the 39 New Deal for Communities received around £50m – and that was from the late 1990s and early 2000s. The £20m distributed via this fund looks small in comparison.
The economic environment is very different from the early years of the previous Labour Government, but around £2m a year to tackle the problems of the areas who received this funding is not a lot.
Hopefully, there will be more to come through other funds over the coming years. It will be important that the Neighbourhood Boards think strategically and look to use this money to lever in further investment where they can via other government funding streams and the private sector.
The second issue is around the selection of areas. The Ministry of Housing, Communities and Local Government has decided to run with the same methodology used to select areas included in the last Government's Long-Term Plan for Towns.
This methodology examines areas with relatively small populations on the basis of skills, life expectancy, earnings and productivity. It replicates the major shortcomings of how levelling up funding was distributed ie, it misses out London and also results in some very deprived areas being overlooked. Blackpool is a notable example from the Plan for Neighbourhoods.
The final challenge will be capturing impact and supporting areas to learn from each other. There is little about this in the prospectus for the plan and hopefully more information will come in due course, but these will be crucial factors, especially when funds for the programme are limited.
The Plan for Neighbourhoods represents a clear break from the recent past, but the impact of levelling up lingers on. To succeed it will require a laser-like focus on what makes an impact at local level and strong leadership. It will also need a government that is truly into addressing regional inequality for the long haul.
Professor Graeme Atherton is head, Ruskin Institute for Social Equity (RISE) and vice principal at Ruskin College, Oxford
