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HBC postpones levelling-up bid to round 3 — if there is one

Although round 2 of applications to the government’s Levelling Up Fund is under way, Hastings Borough Council (HBC) has decided to hold back its bid until round 3 — assuming there is one. In the meantime it is seeking a change in the assessment criteria. Report by Nick Terdre, research and graphics by Russell Hall.

Round 2 of the Levelling Up Fund, one of the government’s major initiatives to improve the lives of British citizens, is under way.  Following problems with opening up the bid portal on 31 May as scheduled, the Department of Levelling Up, Housing and Communities (DLUHC) has promised to allow bidders two weeks to load up the lengthy and complex packages which constitute their bids once the portal is functioning.

The political turmoil of the last few days has seen levelling-up minister Michael Gove sacked and replaced by Greg Clark, while three of the four junior ministers resigned and have been replaced.

Hasting Borough Council initially planned to put in a bid in round 2 but then changed its mind. In an email to councillors HBC leader Paul Barnett explained that its submission would be postponed until round 3. “This will give us and partners more time to build a really strong application that will fit within the constraints of the bid framework and deliver what we need for the town,” he said.

A sizeable amount of money is at stake — up to £20m for most projects, or even £50m for exceptional transport and cultural proposals. HBC wants backing for a new sports, cultural and health campus on the site of the Summerfields leisure centre. However, not only does the council consider it impractical to prepare a ‘shovel-ready’ bid for a complex project in the short time available in round 2, but it also wishes to lobby the DLUHC to give more weight to health equity considerations rather than the purely economic outputs prioritised by the department.

Summerfields Leisure Centre, where HBC plans to develop a sports, cultural and health campus

And it is not just HBC — Barnett has told HOT that Hastings is leading a lobbying initiative to modify the assessment criteria on behalf of other East Sussex local authorities.

Risky approach

However, HBC’s approach looks risky:  the government has not confirmed that there will be a round 3. For this reason other councils are making a point of applying in the current round — as Alexander Rose of  law firm DWF, which is advising several bidders, told the Financial Times, “The government has not made clear if there will be a third round, so everyone is bidding in case they miss out”.

In the first round, £1.7bn of the total levelling-up pot of £4.8bn was awarded, and it is possible that not all of the remaining £3.1bn will find homes in the second. But even if a third round takes place next year, this would leave little time for implementing a complex project within the fund deadline of March 2024, though in exceptional circumstances this can be extended by a year.

The Levelling Up Fund is intended to improve the lives of UK residents by ironing out often glaring differences in the level of infrastructure across the nation in three main fields: transport connectivity, town centre and cultural facilities. Transport is an East Sussex County Council (ESCC) responsibility, leaving the lower tier authorities to focus on town centre and cultural facilities.

While all areas of the UK may apply for funding, it is particularly aimed at places like Hastings — “where it can make the biggest difference to everyday life, including ex-industrial areas, deprived towns and coastal communities,” in the words of former chancellor Rishi Sunak.

HBC did not bid in the first round as it coincided with the Town Funds bid and the council did not feel it had the capacity to handle two major bids at the same time, Barnett told HOT.

Capacity funding

Since then, so-called capacity funding of £125,000, to support the preparation of bids, has been made available to Hastings and other priority towns, including all East Sussex lower tier councils except Wealden. HBC, whose Town Funds bid benefited from £173,000 in capacity funding, has confirmed receipt of its allocation.

Bid prospects may be modestly enhanced by the formal support of the local MP. HBC told HOT they are in discussions with Sally-Ann Hart.

Hastings’ Town Funds bid won an award of £24.3m but other places were also able to land levelling-up monies — Newhaven, for example, scooped £12.7m in addition to a Towns Fund award of £19.3m.

In round 1 East Sussex County Council received £8m to replace the Exceat bridge in Seaford, Eastbourne £19.8m for town centre regeneration and Lewes £12.7m for a seafood and acquaculture industries improvement project in Newhaven. Rother put in an unsuccessful bid.

Even without a contribution from the Levelling Up Fund itself, Hastings has done relatively well in securing funding from the various pots with similar objectives, largely thanks to the Towns Fund, as the table below shows.

Summing awards and allocations from the Levelling Up Fund and other sources of public money with similar objectives, Hastings stands relatively well among the lower tier East Sussex councils, thanks mainly to its Towns Fund award. Bus Back Better is a scheme under which ESCC has been awarded indicative funding of up to £41.4m to improve the county’s bus services.

Under the levelling-up process, each local authority is allocated one bid for each constituency or part constituency in which it lies. As Hastings lies wholly within the Hastings & Rye constituency, it has only one bid. By contrast Rother gets two bids as it lies within two constituencies Hastings & Rye and Bexhill & Battle.

Unsuccessful bids in round one may be used again in round two. So Rother still has two bids. Lewes, which has two bids, was successful in one in the first round and therefore has one remaining for round two. Eastbourne’s sole bid was successful in round one, so it should have no bid in round 2 but its MP, Caroline Ansell, has revealed that a second is proposed, and the council has told HOT it is preparing one “based on the government advice we have received”.

Competitive bidding

The awards are based on a competitive bidding process. In the first round many bids were rejected  according to the BBC, which made use of Freedom of Information requests to built an overall picture, 38 councils in England received some or all of the funding they requested, 28 had all their bids rejected and 34 did not bid.

The department’s handling of the process was criticised by the House of Commons Public Accounts committee for finalising the principles for making awards only after the identities and scores of shortlisted bidders were known, enabling ministers, as one press report put it, to “allow billions of pounds of ‘levelling up’ cash to be handed to their favoured areas.”

Other funds which share the general levelling-up objectives include the Community Renewal Fund and the UK Shared Prosperity Fund (UKSPF), as well as the Town Fund.

In April Hastings was allocated a share of the £2.6bn UK Shared Prosperity Fund (UKSPF) introduced by the government to replace two European Union structural funds – the European Regional Development Fund and European Social Fund – which are no longer available following Brexit.

Lower tier authorities including Hastings, Eastbourne, Lewes and Rother have been given £1m, and Wealdon £1.18m. Upper tier authorities have been allocated a grant to be spent on the Multiply adult numeracy programme, in ESCC’s case £2.52m.

UKSPF per capita allocations to lower tier East Sussex councils

Allocations criticised

On several occasions Cllr Barnett has criticised the UKSPF allocation as not giving Hastings a “fair share of the funding”. At the Full council meeting on 26 May, he said that Hastings was only getting “about a fifth of what towns like Blackpool and Stoke are getting further north, but it’s also less than almost all the other local authorities in the Southeast”.

However, in an apparent response to criticism of the competitive bid process, UKSPF allocations have been made using a fixed formula. According to the government, the allocation methodology ensures that each recipient authority receives a sum which, at a minimum, matches the EU Structural Funds received in 2014-2020 in real terms, with 70% allocated based on population and 30% according to a needs-based index.

Hastings (purple bar) has the eighth highest UKSPF allocation of lower tier councils in the South East

And in per capita terms, Hastings comes out well — its allocation of just under £10.80 per person is the eighth highest of lower tier local authorities in the South East, and more than Rother’s £10.34, Eastbourne’s £9.68, Lewes’ £9.66 and Wealden’s £7.20.

The money will be disbursed into three tranches, starting in October. But first the local authority has to develop an investment plan in partnership with local business and community interests. Barnett has suggested it should be spent on improving some of the playgrounds in the town’s poorest areas.

The interactive map below shows details of per capita allocations across the UK.

Before the UKSPF came the £220m Community Renewal Fund, intended as a sort of bridge between EU funds, which according to the government will still be being spent in 2023, and the UKSPF. Some £2.5m of this fund was allocated to five East Sussex projects (the county council was the lead authority in applications) – including over £636,000 for the Hastings 2066 project that is to use virtual reality technology to allow people to explore features of the town from home – and £100,000 to develop a ‘whole system’ approach to volunteering under the leadership of Hastings Voluntary Action.

But the big money at stake now is that available from the Levelling Up Fund, and the fate of HBC’s postponed bid. Rother has confirmed it will put in a second round bid.

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Posted 19:51 Tuesday, Jul 12, 2022 In: Local Economy

2 Comments

Please read our comment guidelines before posting on HOT

  1. Russell Hall

    The All-Party Parliamentary Group for the South East, chaired by Sally-Ann Hart MP, has published its report on what Levelling Up means for the South East. Four recommendations are made in the report ‘to ensure that levelling up benefits every part of the UK’:

    1. Levelling up should not be about North versus South and must not come at the price of “levelling down” the South East.

    2. To be truly effective, levelling up must build on place-strengths with a renewed focus on skills and business driven economic clusters.

    3. Higher levels of devolved powers should not require further centralisation and directly elected mayors where it is not desired.

    4. Levelling up must address the ultimate issue of local government finance in the short and long term with an emphasis on certainty and flexibility.

    The report can be found here: https://www.secouncils.gov.uk/south-east-appg-publishes-inquiry-report-on-levelling-up

    Comment by Russell Hall — Wednesday, Jul 27, 2022 @ 22:57

  2. Leah Levane

    Thank you for publishing the detail about the processes. For me this highlights so much that is wrong with them…a competitive bidding process? Why – if the government recognises that the money is needed, then just allocate it and agree business plans, targets, monitoring, etc. And, of course, these figures sound good, even generous but they are overwhelmingly for capital projects (which we do need) rather than services – which have been cut to the bone. The increased fuel bills for pubic buildings and the dramatic increase (a year on year increase) combined with the savage cuts to local authorities, especially in poorer areas such as ours, means less and less being available to support people in need. Meanwhile, councils are forced to spend time chasing these pots of funding.

    Comment by Leah Levane — Friday, Jul 15, 2022 @ 09:11

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