Levelling-up plans in the lurch as spending cuts loom
Billions of pounds of levelling-up commitments could be torn up as the government moves to “austerity 2.0” on the back of chancellor Jeremy Hunt’s new economic plan.
Local authorities have raised concerns that soaring inflation – now at 10.1% – has rendered many of their proposals unviable without additional money.
However, the Department for Levelling Up, Housing and Communities has indicated bids that are no longer viable will need to scale down or resubmit plans for more funding.
Billions of pounds of levelling-up commitments could be torn up as the government moves to “austerity 2.0” on the back of chancellor Jeremy Hunt’s new economic plan.
Local authorities have raised concerns that soaring inflation – now at 10.1% – has rendered many of their proposals unviable without additional money.
However, the Department for Levelling Up, Housing and Communities has indicated bids that are no longer viable will need to scale down or resubmit plans for more funding.
Levelling up secretary Simon Clarke said: “There is a mechanism within the levelling-up fund to allow bids to be resized for inflation.”
Westminster sources told EG that in the event of resubmission, proposals are likely to be refused.
Speaking in the Commons on Monday, Clarke said that out of the £1.7bn round one levelling-up funding already committed, just £187m – or a little more than 4% – has been paid to date. The awards were made to 85 lead applicants across 105 bids from around the UK.
“We expect that amount to increase significantly as these projects move through the delivery phases,” said Clarke.
Clarke blamed inflation on “Putin’s illegal war” but refused to answer reports that the £4.8bn funding package itself would fall victim to Treasury cuts.
Shadow levelling-up minister Alex Norris said: “Those who have been promised money are now concerned that Downing Street’s economic crisis and soaring inflation will mean that their bids are no longer affordable.”
SNP home affairs spokesperson Stuart McDonald said: “How much of the “fat to be trimmed” will have to be found in levelling-up budgets?”
Levelling-up minister Dehenna Davison chose to avoid the direct question but said that “with regard to inflation, we are working with local authorities to see specifically how we can support them to ensure that their projects are delivered”.
Regardless of whether the bids lose funding or are deemed unviable, delays have already put a number at risk. Successful applicants for the second round of funding were expected to have been announced last month.
Instead, they were first postponed to the end of November, with Clarke saying that he expected them “by the end of the year”.
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