SIGNIFICANT cuts to funding has raised major questions about how the Government will achieve its levelling up agenda, MPs have warned. 

A Treasury Committee report has found a £1bn post-Brexit cut to regional development investment have placed the funding for the Government's flagship levelling up agenda in doubt. 

Money provided by the UK Shared Prosperity Fund will only provide 60 per cent of the cash provided by the EU Structural Investment Fund, formerly used before Brexit.

The controversial new UK fund will replace structural funding offered by the European Union, but will be administered centrally by Westminster. 

It comes after The Northern Powerhouse Partnership revealed people in the north of England are at risk of losing out on £300m for regional economic development, double the average cut per head as the rest of England.

MPs also expressed their surprise that the size of the fund is being reduced to such an extent despite being intended as one of the 'centrepieces' of the Government's levelling up ambition. 

Read more: Success of levelling up for the North questioned

"The Government will need to demonstrate how these reduced funds will achieve their defined metrics for levelling up," it said. 

Despite being mentioned 91 times within the Autumn Budget and Spending Review there is a lack of specific detail on how levelling up will be measured and achieved, the report said. It added: "Re-badging existing programmes may not have the impact the Government is seeking.

It also said the spending power for the levelling up department's activities are "being kept flat or falling" once the increases in social care funding are excluded.

"This Committee awaits this Department’s forthcoming white paper to understand how levelling up will be measured and achieved within the budgets announced," the analysis concluded. 

The 2020 Spending Review announced a £4.8 billion Levelling Up Fund. In the 2021 Autumn Budget and Spending Review, the Levelling Up Fund remained at £4.8 billion, but just £1.7 billion of the Fund was allocated. A further round of funding is expected later this year. 

The Government’s approach to levelling up is underpinned by four principles:

  • Spreading opportunity and improving public services, particularly where they are weaker
  • Boosting living standards, particularly where they are lower
  • Restoring local pride
  • Empowering local leaders and communities

"Investing in people is therefore at the centre of the government’s levelling up agenda,” it adds.

Read more: Government Levelling Up policy still unclear without white paper

The Northern Echo: Rishi Sunak on a visit to Yarm last year. Picture: HM TREASURY Rishi Sunak on a visit to Yarm last year. Picture: HM TREASURY

The Treasury Committee asked the Chancellor Rishi Sunak for one outcome in which the Government is most focussed on when it comes to its levelling up agenda. 

In response, the Chancellor mentioned how an influx of investment on Teesside has created new opportunities for locals. He spoke of "pride in place" and enriching communities to make them nicer places to live. 

"If you are in Teesside, that will be about the Freeport and the transition to hydrogen and carbon capture and storage," Mr Sunak said.

"It will be about the Treasury being there. That will make people feel that levelling up has been delivered. If you are in a village in the south-west, it might be about broadband in a rural area. It will be slightly different things, but it is this idea that, 'Where I am, opportunity is too'."

A Treasury spokesperson said: “We’ve taken a major step in levelling up right across the UK, with the Budget and Spending Review funding an ambitious domestic agenda to boost investment to improve people’s everyday lives.

 “This includes investing billions to improve connections in our city regions and transform local bus services outside of London, boosting skills training, and launching the multibillion-pound UK Shared Prosperity Fund.

 “The upcoming Levelling Up White Paper will set out the next steps in how the huge investment set out in the Spending Review will deliver on this central mission.”

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