A proposal to curb ministerial influence over the £4.8bn levelling up fund after claims of possible bias in favour of Tory seats has been rejected by the government.

Analysis has revealed more than half of the 100 most deprived areas of the country have not yet benefited from the fund. The awards are under fresh scrutiny after former chancellor Rishi Sunak told an audience in Tunbridge Wells, Kent, that he changed funding formulas to divert money from “deprived urban areas”.

The government has now rejected a recommendation by the Commons public accounts committee to hold back the identities of shortlisted bidders from ministers until the principles for allocating awards have been finalised. It said such a move was unnecessary and impractical.

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The selection process for the first round of bids was previously criticised by Keir Starmer as looking like “pork barrel politics”.

Officials say the levelling up fund has fairly and transparently delivered vital investment across the country.

Blackpool, the most deprived area in England, was turned down for levelling up funding in the first round. Meanwhile, more affluent communities with Tory MPs submitted successful bids, including a film studios project in Kent and a proposal to improve a traffic junction in a Bedfordshire village.

This weekend, Lisa Nandy, the shadow levelling up secretary, called for an inquiry into why some of the poorest communities have so far missed out in levelling up awards.

She said: “Rishi Sunak let the cat out of the bag when he boasted that he’d fixed the rules. Taxpayers’ money should always be spent fairly and in areas where it is most needed – not used for party political gain.”

Lisa Nandy
Lisa Nandy said: ‘Rishi Sunak let the cat out of the bag when he boasted that he’d fixed the rules.’ Photograph: Gareth Fuller/PA

The government announced new investment deals to support regeneration in the spending review in November 2020, including a new UK levelling up fund and continued investment in a £3.6bn towns fund to improve more than 100 communities across England.

The methodology for allocating levelling-up awards faced criticism for not using deprivation levels to rank areas for priority funding. It instead used the unemployment rate and productivity data, along with an assessment of the local transport and regeneration needs.

Analysis by the Financial Times in March last year found some of the most deprived areas of the country were classified as “priority two” in the rankings used to distribute funding. It reported the categorisations favoured some prosperous Tory-voting areas.

The first round of awards was announced in October 2021, with 105 successful awards totalling £1.7bn. Barrow-in-Furness, Burnley, Doncaster, Leeds and Leicester were among the places that submitted successful bids.

An analysis published by the Centre for Inequality and Levelling Up at West London University, however, later revealed that 61 out of the 100 most deprived areas in England did not receive any funding.

Professor Graeme Atherton, head of the centre, said: “This is the flagship fund for levelling up and some of the most deprived areas, including Blackpool, have not yet received any funds. It does raise questions about how the money was allocated.”

Successful bids in the first round of applications included one for £14.8m from Ashford borough council for new international film studios with commercial and residential developments. The proposed complex was supported by the former Conservative cabinet minister Damian Green.

Central Bedfordshire council won £6.8m of funding to improve the A6/A507 roundabout at the village of Clophill, which lies on the River Flit, in a bid that was supported by culture secretary and local MP Nadine Dorries.

Applications for the second round of the flagship levelling-up fund closed earlier this month. Birmingham, Nottingham and Torbay are among the places that have submitted bids.

The applications include a bid by Lancaster city council for £50m for the Eden Project North, in Morecambe a proposed sister project to the visitor attraction in Cornwall. The project envisages three giant shell-shaped pavilions on the town’s seafront.

A spokesperson for the Department for Levelling Up, Housing and Communities denied there was any bias in funding allocations. The spokesperson said: “We have already strongly rejected these claims – the first round of the levelling up fund is delivering vital investment to communities across the UK that have for too long been overlooked and undervalued.

“Bids were assessed by processes that are transparent, robust and fair – and took no account of areas’ political control.”

Officials say Blackpool has received £39.5m from the towns fund and 12 projects in the north-west have already benefited from more than £230m of levelling-up funds.

Source: The Guardian