Seats held by seven cabinet ministers are in line to receive tens of millions of pounds of development cash despite previously being judged as not needing the funds, triggering fresh accusations of bias in “levelling up”.
The constituencies of Rishi Sunak, the chancellor, Liz Truss, the foreign secretary, and Stephen Barclay, the chancellor of the Duchy of Lancaster, are on a list of “priority places” ahead of a new £1.5bn annual fund.
Yet all three – plus those of Northern Ireland secretary Brandon Lewis, trade secretary Anne-Marie Trevelyan, chief whip Mark Spencer and Robert Jenrick, the former communities minister – had been classed as “most developed” and unlikely to receive grants.
The revelation, from research for The Independent, has provoked a fresh outcry over a post-Brexit shake-up of development spending, after delays that have already swiped around £1.5bn from needy areas this year.
Independent experts warned ministers are ignoring where “need is greatest” and making a mockery of Boris Johnson’s celebrated pledge to level up the country.
Labour accused the government of “funnelling money to richer cabinet ministers’ constituencies”, after similar controversies over different funding pots.
The long-promised UK Shared Prosperity Fund – to replace the loss of the £1.8bn-a-year EU structural funds – is already mired in controversy, after being delayed until next year.
The government promised to match the pre-Brexit grants – to build local economies by attracting businesses and jobs – but even a stopgap £220m fund, for 2021-22, has yet to hand out any money.
A total of 100 “priority places” were announced, across England, Scotland and Wales, for that stopgap UK Community Renewal Fund to help them “prepare” for grants from the £1.5bn Shared Prosperity Fund to follow next year, although other areas will also be eligible.
That list sparked anger by excluding some poorer areas – Liverpool, Sheffield, Knowsley, Carlisle, Plymouth and Preston – that received the EU funds.
Now research by the House of Commons library has revealed that seven cabinet ministers’ seats were in low-priority “most developed” areas under the old scheme – but are now first in line for many millions of pounds each.
They are in the local authorities of Richmondshire, in North Yorkshire (Mr Sunak’s constituency), King’s Lynn & West Norfolk (Ms Truss’s), Fenland, in northeast Cambridgeshire (Mr Barclay’s), Newark and Sherwood, in Nottinghamshire (Mr Spencer’s and Mr Jenrick’s), Northumberland (Ms Trevelyan’s) and Great Yarmouth (Mr Lewis’s).
Liz Truss, the foreign secretary
Of the 49 council areas in England that were considered “most developed” but are now “priority places”, no fewer than 35 have Conservative MPs, or a majority of Conservative MPs.
The New Economics Foundation think tank hit out at the way the fund has been set up, accusing ministers of wasting “a golden opportunity” to target areas still suffering from the loss of old industries.
“These delays and its allocation process – which seems to pay little heed to where the need is greatest – are a missed opportunity to give people greater control over their local economies,” said Frances Northrop, NEF associate fellow.
Professor Steve Fothergill, of the Centre for Regional Economic and Social Research at Sheffield Hallam University, also condemned a “badly flawed” process that would aid “distinctly prosperous areas” at the expense of poorer ones.
He criticised the use of local authority district data – when local economies stretched much wider – and population density as a criteria, “a discriminator in favour of rural areas” which tend to be Tory.
“The civil servants have screwed this up with a formula that’s generated some bizarre and silly results,” Prof Fothergill said, while rejecting the idea of a “political fix”.
He added: “EU structural funds have been the largest source of funding for economic development for 30 years. The government can’t be serious about its levelling up agenda if this list is used for allocation of the Shared Prosperity Fund.”
And Steve Reed, the shadow communities secretary, said: “Funnelling money to richer cabinet ministers’ constituencies, at the expense of poorer ones, will do nothing to fix the regional inequalities the Conservatives have created and worsened over the last decade.”
The Shared Prosperity Fund is due to start next April, but bids have not yet been sought – and there are doubts over whether all funding will be replaced, with only an annual “average” of £1.5bn to be spent.
With ministers and officials in Whitehall making the decisions on allocations, there are also fears of a power-grab that will undermine the union.
The Department for Levelling Up, Housing and Communities defended the way areas were chosen and confirmed it would enable them “to take full advantage of the UK Shared Prosperity Fund when it launches next year”.
“The selection process for the UK Community Renewal Fund is transparent, robust and fair to help identify areas most in need of funding,” a spokesperson said.
