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Stronger towns fund is too little too late

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Commentary on the government’s announcement of a “drop in the ocean”

 If the £1.6bn stronger towns fund announced by ministers this morning was intended to bribe to Labour MPs into voting for the prime minister’s Brexit deal next week then Theresa May should be worried she is not going to get value for money.

There will be little sympathy from local government quarters though given the backlash was entirely predictable to anyone who has been paying even cursory attention to the state of council finances in recent years.

The majority of the fund – £1bn – has been allocated to English regions according to a needs based formula while the remaining £600m will be open to competitive bids, including it seems from towns in the devolved nations. It doesn’t take much mathematical ability to work out that £1.6bn between hundreds of towns in the UK and over more than six years does not add up to very much, especially after nine years of budget cuts and austerity.

Sure enough Twitter was soon full of council leaders and MPs pointing out that the amount their place might gain was a tiny fraction of what they had been forced to cut from their budgets since 2010.

Manchester City Council leader Sir Richard Leese (Lab) said his council was more than £281m a year worse off than it was in 2010 in real terms, the equivalent of the whole of the allocation of the stronger towns fund to the north west. Doncaster MBC mayor Ros Jones (Lab) described it as a ”drop in the ocean” while at the council’s budget setting meeting this afternoon chief executive Jo Miller said the council estimated it would get between £11m and £13m over the six years.

Adding to the ire with which the fund was received is the fact that the £1bn will be distributed via local enterprise partnerships and “following a bidding process”. As one senior source at the Local Government Association told LGC this afternoon, it will mean the money takes longer to get spent and start making a difference than had it gone directly to local government.

Wyre Forest DC chief executive Ian Miller said the fund looked like a “centrally-run bidding scheme where ministers and civil servants in Whitehall take the decisions, following expensive bureaucratic beauty parade. Money is not given to #localgov, so not ‘taking back control’”.

Speaking at an event on the future of high streets in struggling towns this morning, Wakefield MBC leader and Key Cities chair Peter Box (Lab) said there had been “no serious consultation” with local government about how the fund should be spent or administered, only adding to the sense of a bribe. “It’s something that has been scribbled on the back of a cigarette packet in a desperate attempt to get people to vote for them,” Cllr Box said.

The formula for allocating this money is apparently based on measures of “productivity, income, skills, deprivation metrics and proportion of the population living in towns”, although as ever the exact metrics have not been published. Even accounting for population differences the fact that the south west  – a region which would on the face of it would score poorly on many indicators – will receive just 3% of the £1bn while the more solidly Labour north west will get 28% has raised eyebrows.

The announcement of the fund also served as a reminder that details of the promised UK Shared Prosperity Fund which is to replace EU structural funds have yet to emerge. A spokesperson for the Ministry for Housing, Communities & Local Government told LGC today that the stronger towns fund was additional to that.

Announcing the fund, Ms May made an explicit reference to Brexit. “Communities across the country voted for Brexit as an expression of their desire to see change – that must be a change for the better, with more opportunity and greater control,” she said.

“These towns have a glorious heritage, huge potential and, with the right help, a bright future ahead of them.”

However, that it has taken almost three years since the referendum result for the government to explicitly address these issues only adds to the sense of cynicism surrounding the fund. Once again it appears to be a case of too little too late.

Sarah Calkin, deputy editor, LGC

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Readers' comments (1)

  • The UK government should put the net £8.9 billion annual contribution of UK taxpayers money into a 'stronger UK towns fund' when we leave the EU (if we leave at all at this rate). This money is currently funnelled away from neglected UK towns straight to those in the rest of the EU. Even better if we have a new government that would actually ensure a fair distribution.

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