Local economies

Spending review gives a little hope to communities – but some way still to go

Matt Leach, CEO at Local Trust, gives his verdict on Rishi Sunak’s first spending review.

In amongst the departmental finances and the gloomy economic forecasts of yesterday’s spending review, there was a welcome acknowledgement that social infrastructure – places to meet and community activities – is just as important to our quality of life as the roads, and railways that connect us to our jobs 

Nevertheless, there is still some way to go if we are to improve prospects in the most ‘left behind’ neighbourhoods, not least by ensuring that the announcement of short-medium term investment in levelling up infrastructure is matched by longer term sources of funding, capable of rebuilding the neglected social fabric of these communities. 

In many of these places, previous topdown regeneration initiatives have not worked.

For the last year, Local Trust has been advocating for direct investment in neighbourhoods that are ‘left behind’ – often communities located on the periphery of former industrial towns and cities in what has now become known as the ‘Red Wall’.

Our research shows how ‘left behind’ neighbourhoods often lack places to meet and have much lower levels of community activity and transport and digital connectivity, whilst simultaneously facing significant levels of deprivation. This combination of factors appears to result in significantly worse outcomes than otherwise similarly deprived places – a challenge being addressed by the recently formed APPG for ‘left behind neighbourhoods. 

Turning these places around will require both targeted policy intervention and significant investment over a much longer timeframe than the period covered by the current spending review.  Local Trust’s experience delivering the Big Local programme in 150 neighbourhoods across the country demonstrates that where the social fabric of a community has been allowed to run down, long term investment, over a period of at least 10-15 years, is needed to build sustainable change in these communities. 

Another key insight from the Big Local programme has been the extent to which creating lasting change requires a transfer of power to communities – making them responsible for spending decisions to improve their neighbourhoods. In many of these places, previous topdown regeneration initiatives have not worked, and new approaches are needed to develop the confidence and capacity of communities. 

This is very much consistent with the Chancellor’s emphasis in his announcement that spending should reflect what is important to local people. If the views of MPs, mayors and local authorities will be critical in the success of bids for new funding for economic renewal and town centre redevelopment, it is as least as important that local residents are in the lead in defining priorities for transforming their own neighbourhoods. 

So how do the government’s spending proposals match up to what we think is needed? 

Levelling Up Fund 

The announcement of a £4bn Levelling Up Fund for local infrastructure, prioritising “places in need, those facing particular challenges, and areas that have received less government investment in recent years” is very welcome. As is the news that it will support community infrastructure alongside more traditional infrastructure investment, such as bypasses and other local road schemes, bus lanes and railway station upgrades. 

Recent polling commissioned by Local Trust in ‘left behind’ neighbourhoods has shown that residents believe they are missing out on investment in places to meet and recreational facilities in particular when compared to other places. These deficits – often also associated with a lack of community level organisations and civic activity – need to be addressed if people are to feel that their lives have improved as a result of ‘levelling up’. 

‘Left behind’ areas received less than half the emergency funding during COVID made available to local communities when compared to other equally deprived areas.

The focus of the fund on capital or bricks and mortar projects addresses part of the challenge faced by ‘left behind’ areas. But accompanying investment in people and the smallscale activity that brings communities together and builds social capital will also be needed if it is to be a driver of real change in the places that have been left behind. 

UK Shared Prosperity Fund 

The announcement that the UK Shared Prosperity Fund (UKSPF), which will replace EU structural and investment fundswill target places most in need across the UK” such as post-industrial towns and cities and coastal communities – where most ‘left behind’ communities are to be found – is also very welcome. As is the news that one of the key priorities for the Fund will be to invest in communities and place “including cultural and sporting facilities, civic, green and rural infrastructure, community-owned assets, neighbourhood and housing improvements, town centre and transport improvements and digital connectivity” – investment designed to drive growth and regeneration as well as improve quality of life.  

With £220m earmarked for the next year “to support communities to pilot programmes and new approaches, I hope we will see investment in new social infrastructure as well as community economic development increasing civic pride and showing central and local government what can be achieved when residents take control. 

Making a real difference to ‘left behind’ areas 

However welcome both funds are, the reality of accessing funds under any government programme – whether the initial £600m from the Levelling Up Fund or initial tranches of the UKSPF – will make it challenging for many of the most ‘left behind’ neighbourhoods to benefit.  Often such areas lack community organisations and individuals with the knowledge and confidence to make successful funding applications, irrespective of need. This was demonstrated most clearly during the first COVID lockdown, when ‘left behind’ areas received less than half the emergency funding made available to local communities when compared to other equally deprived areas. Long term, foundational investment on very different terms will be needed to turn this around.   

Whilst both the Levelling Up and Shared Prosperity Funds are a welcome first stepwe still need a Community Wealth Fund (CWF) – the proposed dormant asset-funded endowment championed by aAlliance of more than 330 civil society, private and public sector organisations – tasked with the longterm levelling up of our most ‘left behind’ areas. 

We need a fund that ensures residents in ‘left behind’ areas don’t miss out as the nation levels up.

Most recently the proposal has received the backing of 21 local authorities and the more than 60 MPs and Peers in membership of the APPG for ‘left behind’ neighbourhoods. A very similar fund to the CWF – a new independent endowment providing long term investment in ‘left behind’ areas, with communities in control of the spend – was recommended by Danny Kruger MP in his recent report to the Prime Minister. 

Such a fund would help ensure that residents in ‘left behind’ areas don’t miss out as the nation levels up. It could build on important learning from past regeneration programmes and more recent initiatives such as the Big Local programme, which – by putting local people in control of spending decisions and providing long term investment over 10-15 years  has successfully built community capacity and confidenceincreasing social and economic capital and contributed to making communities more resilient for the future. 

The announcement yesterday indicates an understanding of the importance and value of engaged and connected communities and the contribution that social infrastructure makes to quality of lifeBut, if the government is serious about levelling up our most ‘left behind’ neighbourhoods, it needs to commit to delivering a Community Wealth Fund, putting resources and decision making into the hands of local people.