Sunak says he changed funding formulas to put less money into 'deprived urban areas'

Ex-chancellor and Tory leader hopeful says Labour "shoved all the funding into deprived urban areas and that needed to be undone"
Rishi Sunak. Photo: ZUMA Press/Alamy

By Tevye Markson

05 Aug 2022

Rishi Sunak has boasted of changing funding formulas when he was chancellor to put less money into deprived urban areas and more into towns like Tunbridge Wells, a leaked video has shown.

The Tory leadership candidate and ex-chancellor told to Tory members in the affluent Kent town that he had, during his time in government, begun altering funding formulas in favour of rural areas.

The video, published by the New Statesman, shows Sunak telling party members: “I managed to start changing the funding formulas, to make sure areas like this are getting the funding they deserve because we inherited a bunch of formulas from Labour that shoved all the funding into deprived urban areas and that needed to be undone. I started the work of undoing that.”

The average house price in Tunbridge Wells was £528,459 at the end of 2021, compared to the national average of £271,000.

Sunak stepped down as chancellor in July over Boris Johnson’s handling of the Chris Pincher affair, saying “the public rightly expect government to be conducted properly, competently and seriously”. 

His decision to leave government at the same time as then-health secretary Sajid Javid set off a chain of resignation letters that led to Johnson announcing he would resign as prime minister.

It is not clear which funding formulas Sunak was referring in the video to but a source for his leadership campaign mentioned changes to the Green Book.

A source for the campaign said: "Levelling up isn't just about city centres, it's also about towns and rural areas all over the country that need help too. That's what he changed in the Green Book and he will follow though as prime minister.

“Travelling around the country, he's seen non-metropolitan areas that need better bus services, faster broadband in towns, or high quality schools. That's what he'll deliver as prime minister."

The Green Book is Treasury guidance for departments and arms-length bodies on how to appraise and evaluate policies, projects and programmes. Sunak promised to update the document in November 2020 and an updated version was published in March 2022.

Both Tory and Labour MPs have criticised the comments from Sunak, who is up against Liz Truss to be the next Conservative Party leader and, therefore, prime minister.

Shadow levelling up secretary Lisa Nandy said it was “scandalous that Rishi Sunak is openly boasting that he fixed the rules to funnel taxpayers’ money to prosperous Tory shires”.

“This is our money. It should be distributed fairly and spent where it’s most needed – not used as a bribe to Tory members,” she added.

Levelling up, which aims to reduce the gap between richer and poorer parts of the UK by 2030, has been the government’s flagship policy under Johnson’s premiership.

International environment minister Zac Goldsmith said Sunak's comments were up there with the "weirdest and dumbest" he'd ever heard from a politician.

Sunak also set out his desire to make funding formulas “work for rural areas” during a televised Tory hustings in Exeter last week.

He said he “already started to change that” when he was local government minister, in areas such as social care and transport.

“We do it in a way that is better, and we need to do more for schools,” he said.

“We need to make sure that the voice of rural Britain is heard loudly and clearly down in Westminster because often they get it wrong,” Sunak added.

The government has previously been criticised over how the £3.6bn Towns Fund, introduced in 2019, was allocated, with Sunak’s constituency Richmond (Yorkshire) prioritised for extra cash ahead of poorer areas like Salford. 

The Public Accounts Committee said in November 2020 that some towns were chosen by ministers despite being identified by officials as the very lowest priority, with MPs raising concerns that some of the choices may have been politically motivated.

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