Delays in the delivery of levelling up funding will “exacerbate” the divide between charities in richer and poorer areas, New Philanthropy Capital (NPC) has warned.
Between 2019 and 2022, the government announced the Towns Fund, Levelling Up Fund, and UK Shared Prosperity Fund (UKSPF) to support its levelling up agenda across the UK.
The three funds totalled £10.6bn, with £9.5bn allocated by the Department for Levelling Up, Housing & Communities (DLUHC) to local places to be spent by 31 March 2026.
A report published today by the National Audit Office (NAO) found that £2bn has been distributed so far, and £900m spent locally.
NPC: Delays will ‘exacerbate’ existing divide
NAO’s report shows that the delivery of projects across the funds is behind schedule and that local authorities will unlikely be able to complete projects by the original deadlines.
Through the Towns Fund and Levelling Up Fund, “DLUHC sought to fund ‘shovel-ready’ projects”, “but local authorities and other organisations had completed 64 projects [out of a total of over 1,300 planned projects] across these funds by 31 March 2023,” the report reads.
The reasons behind the delays are “multi-faceted” and include inflationary pressures, capacity shortages and supply issues in the construction industry.
Theo Clay, policy manager at NPC, commented: “There have been major issues with the timelines that local authorities were given to spend which will have contributed to this – charities were given just a few weeks to pull together bids.
“Looking at the impact, our data analysis shows that the gap between charities in richer and poorer areas has grown in the exact period that levelling up was meant to be closing it – all this turbulence will be exacerbating that problem.”
Clay added that “we need proper evaluation on what went wrong, and make sure that these funds actually tackle the issues they were designed to.
“In our Levelling Up research we found that people’s priorities were tackling social issues like poverty crime and homelessness, issues which will have worsened since the cost of living crisis. This funding was meant to tackle that.”
Locality: ‘Growing frustration’ among community organisations
In its manifesto, published last week, Locality said there has been “growing frustration with an approach to economic development funding that sees multiple different funding pots aligned to similar aims, many of which are accessed by competitive bidding processes”.
“The Levelling Up Fund, the Towns Fund, the Shared Prosperity Fund, the new Long-term Plan For Towns: significant money is being spent, but it feels uncoordinated and much of it is passing communities by. Indeed, in a recent survey of Locality members, only 14% said they’d seen any benefit from levelling up.”
The survey, which took place between 20 September and 6 October 2023, analysed responses from 105 leaders of community organisations and found that 86% of respondents whose organisations are based in disadvantaged areas have not seen benefits of levelling up in their area.
On the NAO report, chief executive officer (CEO) Tony Armstrong said: “It’s clear that centralised funding pots aren’t doing the trick on levelling up. By continuing to take decisions nationally, this government is just repeating the mistakes of previous initiatives. However, there are real workable solutions and they’re right on our very doorstep.
“From community energy projects to building affordable housing, it’s local community organisations that are transforming their neighbourhoods and helping local people thrive. To truly level up our country, Whitehall needs to let go and put communities in charge. What we need is nothing short of a community power revolution.”
ERSA: Organisations went out of business entirely
Elizabeth Taylor, CEO of the Employment Related Services Association (ERSA), said that NAO’s report identifies “some of the issues that UKSPF has experienced since its inception, with employability organisations throughout the country continually having to face the repercussions of them”.
“Short timescales, delays, underspent budgets and the cliff-edge of funding between the end of the European Social Fund and the beginning of UKSPF led to organisations making staff redundant or going out of business entirely.
“The lack of technical assistance funding to provide the tendering and management infrastructure remains a key concern and must be addressed in the next funding round.
“Worryingly, the report outlines the lack of clarity around future evaluation which is why ERSA will continue to engage with providers and commissioners to ensure that lessons can be learnt and the same mistakes are avoided post-2025.”