What is levelling up funding? Levelling up funding is a government policy that aims to reduce inequality based on where people reside. Back in 2019, levelling up funding was a big slogan within the Conservatives manifesto.
The party wanted to create more jobs, drive growth and ensure people feel proud of the places they live. If you’re unfamiliar with levelling up funding, our blog will provide you with a complete breakdown of what it is, who it’s aimed at, and how it’s affecting contractors.
The Levelling Up Fund
Levelling up funding was introduced to bridge the gap between prosperous and disadvantaged regions, ensuring all communities have equal opportunities for improvement.
Essentially, the Levelling Up Fund allows for direct work with communities across the country – something that was much needed after the pandemic. To support the proposed objectives within the fund, the government set four key investment programmes, including:
- The UK Community Renewal Fund
- The Levelling Up Fund
- The Community Ownership Fund
- The UK Shared Prosperity Fund
A significant part of levelling up funding is the fund itself. If you’re wondering what is the government levelling up fund, you’re not alone.
Although the fund was used to help multiple communities, many people remain unaware of exactly what it is and how it benefits us. The Levelling Up Fund awarded billions of pounds to various projects between 2021 to 2023:
- October 2021 – £1.7bn
- January 2023 – £2.1bn
- November 2023 – another £1.1bn
The fund itself was to be invested in infrastructure to improve the lives of the surrounding communities. This includes transport projects, improving town centres and high streets, and focusing on cultural, heritage, and leisure investments.
However, some MPs have criticised levelling up schemes when they found out that as of March 2024, only 10% of the promised funding has been spent.
Who is The Levelling Up Fund for?
The Levelling Up Fund is for local authorities – primarily to use for areas that need investment. To receive money from the fund, local authorities will need to apply for money from the government to pay for their local infrastructure projects.
All local authorities in the UK can submit bids, and allocation of the fund is completed through a process of competitive bidding.
Back in January 2023, the first and second set of rounds combined had 834 bids, with 216 becoming successful. A staggering 158 awards were made to authorities across England with a set value of £3.0bn (equating to 78% of all the funding awarded).
Although numerous areas bid for their share of the fund, the North West of England received the most money in both rounds of funding overall. Fast forward to November 2023, and a third round of the Levelling up Fund has awarded a share of £1bn to 55 local projects. This is to help:
- Create more jobs
- Improve local communities
- Increase opportunities for infrastructure development and cultural projects
The Levelling Up Fund vs The UK Shared Prosperity Fund
The UK Shared Prosperity Fund (UKSPF) differs slightly from the Levelling Up Fund. The UK Shared Prosperity Fund is a government replacement for the European Structural and Investment Programme (ESIF), providing funding to local authorities to help improve communities and support businesses and people.
One of the main aims of the fund is to increase quality of life and to build pride in place. The UKSPF is funded up until March 2025.
The fund is there to help all areas of the country – even the more affluent parts that are still subject to deprivation and require ongoing support. Although both the Levelling Up Funding and UKSPF aim to help communities, they do have differences.
| The Levelling Up Fund | The UK Shared Prosperity Fund | |
|---|---|---|
| Funding Goals | Infrastructure | Communities, places, businesses, people, and skills |
| Application | Competitive bidding | Formulas |
| Funding Amount | £4.8bn total | £2.6bn total |
How the Levelling Up Fund Has Affected Contractors
The Levelling up Fund process has had numerous delays, and as a result, contractors working in the construction industry have been impacted and left feeling frustrated.
The first round of the Levelling Up Fund was mainly awarded to projects that were in a state of readiness to proceed. These projects were supposed to be ready by March of this year – but instead, 60 out of 71 of these had to be extended.
This was mostly down to a combination of project-specific issues, COVID-19, inflation, and lack of transparency while awarding funds. As expected, these delays have had negative impacts on contractors across the country.
Some projects that received funding claimed to be ‘shovel-ready’, however, many of the projects were not as advanced as anticipated, resulting in delays. The Department for Levelling Up, Housing and Communities (DLUHC) received scrutiny in the media for being “blinded by optimism”.
There were also challenges such as skills shortages, supply chain issues and economic inflation, which extended project timelines. Changes in rules for applying for funds also led to delays – councils spent significant funding on bids they could not win.
The Future of Levelling Up
Levelling up was initially a flagship policy – however, it appears to have slipped down the agenda. However, this could change with the new Labour Government.
Keir Starmer criticised the way the Conservative Party handled levelling up and pledged that Labour improve the process and reduce regional inequalities. He said that Labour would grant more powers to local leaders.
Although Labour are not able to give local governments significantly more funding, they are planning to improve efficiency regarding spending on existing projects. They are also planning to boost private sector investment.
The Labour Party have dropped the term ‘levelling up’, and instead, is focusing on devolution and giving local authorities more power to stimulate economic growth.
Streamline Your LUF-Funded Project
At Procure Partnerships Framework we help public sector organisations up and down the country find compliant contractors in 9 different regions. If funding needs to be used quickly, our two-stage (express) or direct award route allows you to procure contractors fast and compliantly.
Our PCR15-compliant frameworks are managed by experts – all of which remain on hand throughout the entire process from the start of your project to completion, offering guidance and advice. Our frameworks cover:
- Construction
- Professional services
- Infrastructure
- Decarbonisation and retrofit
- Demolition
With our frameworks, you’ll be able to choose between various call-off methods. It’s easy to focus solely on cost, but factors like collaboration and value for money are equally important, as well as early contractor engagement.
To find out more about how we can help streamline your next project, please contact us today to book an appointment with our regional key account manager.
