Charities are “unlikely to receive much” of the keynote government funding promised to local communities, according to analysis by the think tank NPC.
Chancellor Rishi Sunak announced nearly £5bn in spending for local areas in the budget earlier this month, as part of the government’s commitment to "level up" the regions of the UK.
However, NPC’s paper What Will Levelling Up Pay For? described the scheme as a “missed opportunity”, which will focus on capital investment over social infrastructure.
The think tank also raised concerns that the relatively small number of charities in target regions may hit their chances of securing grants.
Fund structure 'works against' charities
The government announced details of three funds in the budget – the Levelling Up Fund, the UK Community Renewal Fund and the Community Ownership Fund – with a combined value of around £5.2bn over the next four years.
The NPC research showed that almost 90% of this funding will go on capital investment such as major transport projects and building renovation.
There is “limited scope” for work to improve social infrastructure, like addressing homelessness and addiction, the think tank said, although there is some potential for charities to deliver skills training.
The paper added: “The nature of the projects funded under the Levelling Up Fund work against charity and community involvement.”
Charities in priority areas
NPC also warned that local charities in the areas prioritised for grants from the Levelling Up may struggle to create the partnerships needed to win grants.
The government has ranked each local authority in the UK according to their priority for funds, from the highest priority one areas to the lowest priority three areas. The analysis showed that there were 28% fewer charities per 1,000 people in the highest priority areas compared to the lowest.
The paper argues that civil society will face additional uncertainty because charities are not listed as potential partners in bids for Levelling Up funds.
It said: “Whether charities are appropriate partners (except in obvious cases such as museums), is therefore likely to hinge on the interpretation of ‘community’ or ‘environmental’ representatives. This may vary from place to place.”
Leah Davis, head of policy and external affairs at NPC, said: “Levelling up should be about more than transport and buildings. The social issues that Britain’s charities are tackling can be just as much of a drag on prosperity.
“The levelling up funds announced in the March 2021 budget were a missed opportunity to close the gap in our social inequalities, so the government should be looking to rebalance its investment in the forthcoming £1.5bn UK Shared Prosperity Fund.”
NPC has recommended that the government focus on social infrastructure support through the Shared Prosperity Fund (SPF), which will provide around £1.5bn in local funding.
Details of the SPF were initially expected early this year, but have now been delayed until the summer.