Areas without mayoral devolution deals claim they are being discriminated against in local growth fund allocations after a minister said regions with mayors would get the “main share” of the cash.
Local enterprise partnerships were invited to bid to the £1.8bn fund for projects to drive growth and create jobs last March.
The County Councils Network said indicative allocations to county-based LEPs “have fallen well short of expectations” with bids arbitrarily rejected.
In comments reported by the Financial Times yesterday, Northern Powerhouse minister Andrew Percy said that regions due to have mayors would get the “main share of funding”.
He added: “Where there are devolution deals in place we know there is a degree of accountability with a mayor and local growth allocations will reflect those deals.”
The Department for Communities & Local Government confirmed the comments to LGC but said allocations would also take into account each area’s past delivery record and the strength of its local partnerships.
Leicestershire CC leader Nick Rushton (Con) (pictured) said: “I had a meeting together with other members of the LEP board with [business, energy and industrial strategy minister] Nick Hurd and told him in no uncertain terms how exceedingly disappointed we were with our indicative allocation. To be fair to him, he said it seemed there were some anomalies that he would look at.
“We bid for £140m, and obviously we weren’t going to get all that, but the £5-8m we were given doesn’t allow us to do anything.”
Cllr Rushton said it seemed clear “money has been disproportionately cut from areas where there isn’t a prospect of an elected mayor”.
Leicestershire, its districts and Leicester City Council are seeking a more limited devolution deal without a mayor.
A CCN spokesman said allocations should be based on the strength of local bids.
“Instead, it would seem that the government is targeting funding on areas who have accepted arbitrary governance arrangements with little link to their potential impact on supporting national growth,” he said.
“A system where funding decisions are being predetermined on the basis on governance structures rather than focusing on delivering real and equitable growth across the whole of England will not create an economy that works for everyone.”
CCN would press the government to allocate the money according to population, pressures, and opportunities for growth and housing development.