While Jeremy Hunt’s first Budget as Chancellor was less explosive than that of his predecessor, it was not without some surprises. Hunt’s ‘budget for growth’ focused on creating innovation to attract investment and tackling current productivity challenges, but also contained new levelling up announcements – a sign that levelling up is still on the government’s agenda.
The Spring Budget announcement came with welcome recognition of the important work community organisations are doing to support local people through the challenges of the cost of living and energy crises. In fact, the Chancellor spoke more about civil society on Wednesday than in the last eight Budget speeches combined. His speech also gave a nod to the role of communities in shaping their places, but we’ll have to look to the detail to see how a voice for communities will be secured in these new levelling up and regeneration projects.
Some wins and losses for community organisations
The announcement of £100 million of new funding for local charities and community organisations is an unexpected win. In his speech, the Chancellor acknowledged the vital role that community organisations play in supporting local people in difficult times, and he recognised that they can often reach people in need that central and local government cannot. This funding will help many organisations to keep delivering for their communities as they themselves face challenges due to the current crises.
However, there was also some more difficult news for the sector when it comes to energy bill support. While households will benefit from the maintenance of the Energy Price Guarantee at £2,500 for a further three months, the Energy Bills Relief Scheme, which has limited energy inflation for businesses, will cease at the end of this month. It is replaced by a more limited Energy Bills Discount Scheme that will provide a discount on high energy bills for eligible businesses for the next year. This is likely to see pressure on community businesses rising again.
While the Budget confirmed that Social Investment Tax Relief will still expire this April, meaning new investments in community interest companies, community benefit societies and charities will no longer qualify for Income and Capital Gains Tax relief, the Chancellor announced the expansion of Community Investment Tax Relief. This will enable Community Development Finance Institutions to increase the amounts that they can raise and lend, which is something I hope will benefit community businesses in underserved areas.
Levelling up and devolution developments
The Budget also saw the announcement of the much-anticipated Trailblazer deals for the Greater Manchester and West Midlands Combined Authorities. These deals will give the combined authorities more decision-making powers and greater funding flexibility and independence through multi-year funding settlements. The Chancellor expressed a hope that these deals would form the blueprint for more and deeper devolution across the rest of England, which is a positive sign that more deals may follow soon. The announcement of the Trailblazer deals is undoubtedly a positive step forward for the devolution agenda, however Government must not forget its Levelling Up White Paper commitment to review neighbourhood governance, so that communities can share in the transfer of power and resources outside of Whitehall too.
We received some more promising news on the levelling up front, as the Chancellor announced the rollout of 20 new Levelling Up Partnerships across England, with over £400 million of investment, as well as a further £200 million for 16 ‘high quality regeneration projects’. Community organisations and residents are explicitly referenced in these Levelling Up Partnerships, recognising that they are best positioned to understand and address the barriers to levelling up in their own community. However, the devil is in the detail, and I will be seeking more information about how these partnerships will be delivered and how space for community voices will be guaranteed within them.
The return of investment zones
The Spring Budget also brought about the revival of the Truss-era Investment Zones, albeit substantially reshaped. Government will invest in twelve new Investment Zones, and has identified eight areas in England where £80 million of interventions will be made available to catalyse growth clusters in a key future sector. Again, there is a focus on partnership working – between government and combined authorities, with local universities, councils and businesses. While the Innovation Zones prospectus acknowledges the need to leverage ‘local talent, institutions and networks’, it should also seek to harness the energy and experience of communities, including truly innovative community businesses creating community tech. Read more about the innovation story we would like to see supported in this post by our community tech partner. And Hunt’s sentiments that these Innovation Zones have the potential to become ‘twelve new Canary Wharfs’ is likely to hit a wrong note for communities in these places. Place matters, and Government should recognise that not everywhere wants to, or can be, a Canary Wharf, and putting communities in the lead is vital to the success of any regeneration project.
Levelling up challenges continue
The Chancellor also confirmed that 30 more places will receive funding from the Community Ownership Fund, taking the total invested in helping communities to take over treasured local assets to just under £24 million of the £150 million pot. He also announced that a third round of the Levelling Up Fund will follow later this year.
While these measures are undoubtedly positive and demonstrate that levelling up is still on the government’s agenda, they also bear the hallmarks of the fragmented and competitive funding regime which has so far hindered the potential of levelling up. The outcome of the second round of the Levelling Up Fund attracted significant criticism earlier this year after last-minute eligibility changes and criticism of the regional distribution of funds, with West Midlands mayor Andy Street condemning levelling up bidding as a ‘begging bowl culture’. It is disappointing that the government continues to direct levelling up and place-based regeneration funding from the centre in this way, particularly given the recognition in its own Levelling Up White Paper of the desperate need for funding reform.
It’s just over a year since Government published its Levelling Up White Paper as a roadmap for tackling regional inequality. The spirit of that white paper is evident in some of Hunt’s announcements this week, particularly on devolution and regeneration. However, it’s also clear that some of the ambitions of the white paper are not being fulfilled, particularly around funding delivery.
Next week, we will publish a new report, ‘Work in Progress’, evaluating the progress of the levelling up agenda from the community perspective. Join us for our launch and panel event on Tuesday 21 March to find out whether levelling up is delivering for communities and what the future holds for the agenda.
image: Fordhall community owned farm, Shropshire