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Budget 2021 – does it deliver for communities?

Chief executive Matt Leach takes a closer look at what the Chancellor’s Budget means for communities

Budgets aren’t just about headline announcements; they are also important signals of the shifts and flows of political narratives and priorities. Understandably, there has been a huge focus on the economic aspects of a budget which was largely focused on rebooting the economy post-COVID and in time will look to rebalance public finances. But there were also positive and hopeful signals emerging for those with an interest in neighbourhood and community.

For the fifteen months since an election defined by the shifting political landscape in what has become known as the Red Wall, there has been a massive focus on ‘levelling up’. Regardless of the politics driving it, this is clearly welcome – the UK has long grappled with the problems caused by huge imbalances between and within regions that will require long term investment to turn around.

Levelling up communities is not just an economic mission; it must be a social one too.

But one thing that has been notable about the ‘levelling up’ agenda prior to yesterday’s budget was the extent to which that challenge has been defined in entirely economic terms. We know, however, that in many of the neighbourhoods that Local Trust works with, economic challenges are only part of the picture of wider inequalities faced by many communities.

Local Trust’s work on ‘left behind’ areas, highlights the extent to which some communities – often peripheral housing estates on the edge of former industrial areas in the north and Midlands – face challenges not just as a result of economic deprivation but also the loss of the social infrastructure – places to meet, local civic activity and wider networks and connectivity – needed to provide a strong quality of life. This is very much consistent with the work of Onward highlighting the critical importance of sustaining what it calls the “social fabric” of communities and Danny Kruger’s report on building stronger communities published in the autumn.

What is notable in yesterday’s package of announcements is the sense that the government is starting to recognise that ‘community’ needs to be part of any overall programme aimed at ‘levelling up’. It is only a small shift in emphasis – there was no hint in the budget of the Community Wealth Fund which is being called for by a growing coalition of organisations and advocates – but it may provide positive signs that government has heard the case and is starting to respond.

The three programmes launched yesterday all point (to different degrees) in that direction.

Community Ownership Fund 

This new £150 million fund will provide cash (up to £250,000 worth of match-funding) for community groups to help them buy or take over local community assets at risk of being lost. In some cases – for a selection of community sports institutions – up to £1 million might be available. At its heart is a recognition of the value of local social institutions; helping “ensure that important parts of the social fabric, such as pubs, sports clubs, theatres and post offices, can continue to play a central role in towns and villages across the UK.”

Civic assets like pubs, sports clubs, and libraries are crucial building blocks of community life.

The guidance further states: “Projects should be focused on place-based assets or amenities, which are important to the local community, build connections between people and foster a sense of pride in the local area – but are at risk of being lost without community intervention.”

This is all good stuff. Civic assets like pubs, sports clubs, and libraries are crucial building blocks of community life in local neighbourhoods and if well implemented, the policy could spur real growth in community ownership, with up to 500 neighbourhood assets set to benefit. There are likely to be several bidding rounds, to ensure that those areas with more to do to work up their schemes do not miss out: the first as early as this summer. Officials have already indicated that an element of the fund might include support to build local community capacity ahead of submitting a formal bid for capital support (although the four-year timeframe for the programme suggests that this might be relatively limited in scope).

We need to see more detail on the bidding process and eligibility criteria, but we would expect that a number of Big Local areas might be very interested in engaging with the fund, using some of their BL funding as matched funding to leverage support to acquire local assets for the benefit of their communities.

Levelling Up Fund

Alongside the Budget, the government published the prospectus to its highly trailed ‘Levelling Up Fund’, which is worth £4.8bn, with £600m available in its first year. The fund will invest in “smaller transport projects that make a genuine difference to local areas; town centre and high street regeneration; and support for maintaining and expanding the UK’s world-leading portfolio of cultural and heritage assets.”

A major challenge will be to ensure that some of the funding available does go to meet priorities in neighbourhoods that are most ‘left behind’.

It’s a competitive fund with anything up to £20m of funding available. Cash will be targeted towards places judged as having the most significant need, as measured by a new index. The exact methodology has not been released yet, but assessment of bids will take account of the following place characteristics: need for economic recovery and growth; need for improved transport connectivity; and need for regeneration. Using this index, places have been placed into a number of categories, with category one deemed to have the highest level of need.

The fund will primarily target investments towards bricks and mortar economic and transport infrastructure in areas of the country which are suffering from both economic challenges and lower levels of infrastructure. Some swift number crunching by the Local Trust team found that 171 of the 225 ‘left behind’ areas identified by Local Trust/OCSI research are within local authorities in category 1; 43 in category 2; and 11 in category 3.

A major challenge will be to ensure that some of the funding available does go to meet priorities in neighbourhoods that are the most ‘left behind’ as opposed to those in the local authority that are less deprived with better social infrastructure.

This may be where the limits of the government’s commitment to community is tested. In its first year, the Fund will prioritise bids that can demonstrate investment or begin delivery on the ground in the coming financial year – this will make it very hard for local communities without ‘oven ready’ projects to access funding; not least as they will only have until noon on Friday 18 June 2021 to get a bid in. It seems the Fund will focus at least initially on projects that are already primed and ready to go.

Despite positive initial soundings that local communities might have a strong say in what and how this new money is spent, the actual published proposals suggest that grassroots community input will be limited. Bids can only be submitted by local councils, who are only required to consult stakeholders such as “community representatives”. Our Survation polling last year showing 70% of people in ‘left behind’ areas saying they or community organisations should have control over any new fund for their area. The Fund expects MPs to back or sponsor their preferred project that affects their constituency; it seems clear MPs are about to be bombarded with additional correspondence….

UK Community Renewal Fund 

The final element in the government’s levelling up package is the new £220 million UK Community Renewal Fund, which is a Fund that aims to trial new approaches and innovative ideas at the local level.

It’s a one-year Fund, running only in 2021/2022, and will act as a bridge between EU structural investment programmes and the new UK Shared Prosperity Fund coming on stream next year. Unlike the Levelling Up Fund, this particular programme will principally support revenue as opposed to capital projects.

What’s welcome about this new Fund is that communities and place is one of the top four investment priorities, alongside support for skills, local business, and employment. Similar to the Levelling Up Fund, lead bidding authorities are councils who will be expected to invite local community and voluntary groups to submit their proposals. A maximum of £3 million is available for each local authority area.

Interventions that support the rich social fabric that underpin strong and resilient communities are vital.

The government have again said that money will be targeted at the most in need. They have identified 100 priority places based on an index of economic resilience which “measures productivity, household income, unemployment, skills and population density.” Though, again, the exact methodology has not yet been released.

Both the Levelling Up and Community Renewal Funds will provide a welcome cash boost to the areas benefitting. But there is concern with both programmes, that shovel ready projects and those that might have been in the pipeline (but have not yet received funding), get prioritised – alongside town centres and high streets, over neighbourhoods, particularly those that have been ‘left behind’ including those in peripheral estates in former industrial areas, and along the coast.

What next?

The recognition by government of the value of community alongside economic regeneration is important. As are the first steps (through the Community Ownership Fund) towards interventions that support and grow the rich social fabric that underpin strong and resilient local communities. Moving forward government needs to consider how this might best be delivered, something that will require a focus on neighbourhoods as well as towns and cities.

Levelling up communities is not just an economic mission; it must be a social one too. And that will require longer term funding commitments, and a focus on rebuilding civic institutions as well as preserving businesses and buildings, particularly where they may have once thrived but have now been lost. The budget contains hints that government may be moving tentatively in that direction.

The government’s response to the dormant assets consultation and its suggestion that it would review the purposes set to benefit provides an opportunity for a major step forward. We hope that government will take this step, by announcing the creation of a Community Wealth Fund to target long term support to social infrastructure in left behind areas. This would provide the necessary foundation for achieving the government’s ambition to ‘level up’ those communities that have fallen furthest behind and most need support.