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Levelling up fund fails to tackle legacy of austerity, says Labour

Heather Stewart
·4-min read
<span>Photograph: Graeme Robertson/The Guardian</span>
Photograph: Graeme Robertson/The Guardian

The shadow communities secretary has accused the government of using taxpayers’ money to “shore up” Tory votes with “cosmetic” projects in hand-picked constituencies, while failing to address the legacy of a decade of austerity.

The Guardian has calculated that 39 of the 45 new recipients of towns fund handouts announced in Rishi Sunak’s budget have Conservative MPs. Meanwhile, areas represented by five cabinet ministers including Sunak himself were placed in tier 1 for the levelling up fund, giving them access to taxpayer funding to help them apply for the £4bn pot.

“It does really look like the Tories are trying to use taxpayers’ money to shore up their own votes locally, rather than tackle the deeply ingrained inequalities that exist in our country as a result of what they’ve done with 10 years of austerity,” said Steve Reed. “They are spending money to their own political advantage.”

The government is yet to make available the qualifying criteria for the levelling up fund, despite Sunak insisting at Wednesday’s press conference that they were “transparently published”.

Reed has written to Sunak to ask him to release more details.

He said the new fund, for which ministers in Whitehall will decide between competing bids, would be “pitting areas against each other” and replace just a fraction of the resources sucked out of communities by public spending cuts and anaemic economic growth.

“The money that’s being distributed by the levelling up fund is just a drop in the ocean, compared to what the Conservatives took away over the last 10 years. It’s like a burglar coming into your house in the dead of night, stripping your house bare and then expecting gratitude for giving you back your TV.

“It looks incredibly cosmetic, and it looks skewed towards the interests of the Conservative party, rather than the interests of the British people, living in areas that have been held back by a decade of austerity.”

Graphic

Reed pointed to a plan in the communities secretary’s Newark seat to restore the gatehouse of a 12th-century castle with some of the £25m received from the towns fund.

“Doing up a medieval gatehouse might provide a lovely photo opportunity for Robert Jenrick ahead of the next election, but it will do absolutely nothing for the people and the communities in the region,” Reed said.

Echoing a theme of a recent speech by Keir Starmer, Reed said Sunak had failed to do anything in Wednesday’s budget to tackle the underlying inequalities that contributed to the UK’s high death toll and deep recession during the Covid pandemic.

“The reason that we got the worst recession of any major economy and the highest death toll in Europe wasn’t by accident, it wasn’t by chance. It’s because our country is so extremely unequal compared to most of the rest of Europe and other major economies,” he said.

“Many people in our country are on very, very low incomes or in insecure incomes. And they were afraid to go and get tested in case they were positive and had to self-isolate, and then couldn’t afford to do it.”

Reed argued that the government’s method of doling out regeneration funds from Whitehall was part of its broader approach of retaining control, instead of handing power back to communities – something Labour hopes to make a political dividing line at the next general election.

“It seems to be in the DNA of the Conservatives, they just don’t trust people, they don’t trust communities, they want to control everything from the centre themselves, it’s why they got so much wrong during the pandemic.”

He highlighted Jenrick’s controversial proposals for planning reform that would see some areas allocated as “growth” zones, in which the presumption would be in favour of new housing proposals going ahead.

“It would be entirely in order for a government to say to a local area, ‘we need you to contribute the following number of new homes to a national target that we would need to achieve’, but then allow that locality to choose the best way to achieve that. But instead of that, they’ve taken the voice of local communities away and handed power to their wealthy friends in the development community, who are funding them.”

Reed, a former leader of Lambeth council, has represented Croydon North since 2012 and was closely involved in Starmer’s leadership campaign.

Asked about recent internal jitters over Starmer’s leadership, he said: “I think we need to give Keir some credit for starting to reconnect the Labour party, not just with the voters who stayed with us, but with the voters that we lost.”