Chancellor Rishi Sunak will use next week’s Budget to expand England’s £4bn Levelling Up Fund across the devolved nations, adding an extra £800m in the process.
Chief secretary to the Treasury Steve Barclay said making the fund – announced in November’s Spending Review – UK-wide would allow the government to target funding “more efficiently and responsibly” between different parts of the country, irrespective of administrative boundaries.
The fund is designed to drive regeneration in “left behind” areas by investing in local infrastructure that has a “visible impact” on people and their communities. It will run from the 2021-22 financial year to 2024-25.
The Treasury said the fund would supersede existing local growth funding streams, such as the Local Growth Fund, Pinch Points Fund, and future rounds of the controversial Towns Fund – which has drawn flak for the way in which ministerial discretion was used to select areas to participate.
It added that the fund would work in tandem with the the UK Shared Prosperity Fund to ensure a package of government support that invested in skills, infrastructure and innovation at local, regional and national level.
Barclay said extending the fund to include Scotland, Wales and Northern Ireland would mean that “no community in the United Kingdom” would be left behind.
“We are committed to levelling-up opportunities right across the United Kingdom so that all communities can benefit from our future prosperity,” he said.
“Our levelling-up fund will back local projects to improve everyday life for millions of people and we look forward to working with all areas to boost local economies.”
Kirsten Oswald, the Scottish National Party’s deputy leader at Westminster, said the expansion of the Levelling Up Fund represented a “naked power grab” on the part of the UK government.
“Rather than passing on funding through Barnett consequentials – which could have seen Scotland receiving its share totalling around £400m – the Tories are intent on dismantling devolution and taking control, with absolutely no clarity over how much will be spent in Scotland,” she said.
“It is utterly shameful that the Treasury is promoting its Levelling Up Fund not long after it cut Scotland's capital budget at the Spending Review by 5% – leaving Scotland to deal with the challenges posed by Covid and Brexit with one hand tied behind our back.”
In a written statement to parliament, Barclay said the government would use the financial assistance powers in the UK Internal Market Act to deliver the expanded Levelling Up Fund, and that cash would be allocated competitively.
“Further details on how the gund will operate will be published at Budget,” he said.