Where change is needed most: power, funding, and culture
The APPG’s inquiry and research have identified many factors that make solving place-based inequality difficult. In ‘left behind’ neighbourhoods, these factors can combine and multiply to create serious barriers to change. In this section we discuss three sets of issues where change is needed around power, resources and culture.
The distribution of power
As things stand, powers, responsibilities, and accountabilities are too deeply concentrated in Westminster and Whitehall for levelling up to plausibly make a difference in ‘left behind’ places. This over-centralisation, and accompanying (relative) weakness of community and local government voices and perspectives is explicitly recognised as one of the causes of place-based inequalities in the Levelling Up White Paper. It references the principle of subsidiarity: the notion that the closer you are to the people who your decisions are going to affect, the more likely it is that they will serve those interests (DLUHC, 2022).2
I think the starting point for me is relationships with communities, and actually bringing those voices into the room.
Mark Gamsu, Leeds Beckett University, oral evidence to inquiry session one
Yet despite recent steps toward greater regional devolution, most ‘left behind’ neighbourhoods in most regions will see little change. The proposed approach to devolving power in the White Paper, which the government has pursued since, revolves around a model of devolution in which government strikes ‘deals’ with sub- regions that have, or are willing to establish, Combined Authorities, almost always accompanied by the creation of a new directly-elected Mayor.
This approach does have some significant advantages. The mayoral model strengthens sub-regional accountability, allowing central government to share power with confidence that visible, functioning accountability is in place in the area in question. The tailored approach to each deal allows them to reflect a sub-region’s specific needs with a different combination of measures and powers, though an unconditional model could also offer regional autonomy. Combined Authorities also operate at a scale that allows them to align strategies and decision making with functional regional economies.
“We can’t expect you to come up with strategies that gets to the heart of problems we face, we are one of the furthest constituencies from Westminster. But you can help communities do this, we know it works.”
Billy Robinson, Ewanrigg Local Trust, oral evidence to inquiry session one
Nevertheless, evidence presented during the inquiry strongly indicates that this model of devolution does not do enough to address neighbourhoods’ particular needs, especially those that are ‘left behind’. Above all, it misses the opportunity to empower more accessible services and lower tiers of local government that are better positioned to facilitate community mobilisation at the neighbourhood level; or indeed to decentralise resources and devolve decision-making directly to local communities themselves.
As discussed above, the characteristics and experiences of ‘left behind’ neighbourhoods are locally specific, and may be very different from those of their surrounding local authority area – let alone those of a wider Combined Authority. Higher tiers of government may simply be too far removed from community needs, knowledge, and identities, and from the highly collaborative place-based partnerships essential for transforming ‘left behind’ neighbourhoods.
It's not just, let's give places money in each of these targeted things, it's let's give places agency too.
Ben Franklin, Director of Policy and Research, Centre for Progressive Policy, oral evidence to inquiry session two
Improving the lot of ‘left behind’ neighbourhoods demands devolution that decentralises power to local authorities and to neighbourhoods themselves: those who best understand and can deliver interventions in line with community needs and priorities of place. Giving each tier new responsibilities to collaborate more locally with entities such as Neighbourhood Forums, or the trusted community partner organisation able to discharge local stewardship duties under Community Right to Build Orders, will help build local capacity and enable community mobilisation within neighbourhoods (Kenyon, 2022).
A growing evidence base demonstrates how, when properly facilitated and organised, community-led approaches to neighbourhood governance can flourish and have a positive impact on local people’s wellbeing, resilience, and health (Pollard et al., 2021). Community organisations may offer the best vehicle for neighbourhood-level devolution, especially in the most ‘left behind’ neighbourhoods, where formal organisations like parish councils or neighbourhood forums are often lacking (Parker et al., 2020).
Given the historic tendency of regeneration and economic development efforts to bypass the most ‘left behind’ neighbourhoods, it is vital that communities in these places are given the means to have a real say in the decisions that affect them, and to take real responsibility for the deployment of levelling up resources. The devolution of power from Westminster cannot stop at the level of the sub-region or the local authority.
The distribution of funding and resources
One of the key challenges faced by ‘left behind’ neighbourhoods under the current funding and resourcing model for regeneration in England is the complexity and bureaucracy of the process. Communities and organisations in ‘left behind’ neighbourhoods often struggle to access the public or charitable funds they need due to convoluted application procedures and stringent eligibility criteria. This can result in a mismatch between available resources and local needs, limiting the ability of ‘left behind’ neighbourhoods to address their specific challenges effectively.
While the levelling up budget has allocated significant funds, it is unclear whether they will be adequate to address the myriad and often interconnected issues faced by ‘left behind’ neighbourhoods; given their history of receiving less than their fair share of funding, it is also unclear whether these resources will even reach them in the first place.
Various DLUHC programmes are currently reporting under-spends, suggesting difficulties in getting allocated funds to where they are most needed (Williams, 2023). Achieving meaningful progress in these communities will likely require not only financial resources, but also targeted investments in social capital, local leadership, and capacity building.
The overall funding model for levelling up in England is often criticised for being too centralised, short-term, bureaucratic, and inflexible. This can hinder the development of context-specific, locally-driven solutions to the challenges faced by ‘left behind’ neighbourhoods, as resources are often allocated according to top-down priorities and predefined criteria. Furthermore, the competitive nature of funding programmes can lead to wasted resources as organisations devote significant time and effort to preparing bids, with no guarantee of success.
“The nature of funding means the actual projects that you’ve got, the things that you’re doing on the ground, they get diverted so that you can try to access at least some of this money. And then the rest of that money is oriented towards whatever busy work the fund itself stipulates that you do, just so you can filter some of it to the work you need to do. When we do complete bids, our experience has been that they have failed very often. So all that time and effort you’ve spent has been completely wasted. And then when you do get them, the funds are time limited. So that after two years or three years, there you go, you’re looking again at trying to replenish it. And it’s really, really hard to find funders for salaries.”
Billy Dasein, East Marsh United, oral evidence to inquiry session four
The dominant funding model also emphasises one-off capital investment while neglecting the revenue funding that is critical for community development. While capital funding is important for making improvements to physical infrastructure, it cannot address the diverse and ongoing needs of ‘left behind’ neighbourhoods on its own. These areas often require investments in social infrastructure, local capacity building, and ongoing support services to achieve sustainable change, and to put in place the necessary building blocks to support local economic growth. By prioritising capital over revenue funding, the current model risks overlooking these forms of social infrastructure that are vital to long term success and strongly correlated with community wellbeing (APPG for ‘left behind’ neighbourhoods, 2020a).
England’s time has come for devolution… Leaders at the local level have to be offered more control and the resources to address the economic development challenges they face, recognising the particular difficulties of their left behind areas. As such, the Treasury has to give up control of some of the functions that it has controlled for so long.
Professor Peter Tyler, University of Cambridge, oral evidence to inquiry session two
Although intended to ensure the most effective use of resources, competitive bidding processes can inadvertently contribute to waste and inefficiency (Kaye et al., 2022). Organisations may invest considerable time and resources in preparing bids, but only a small number of them are successful. Communities encouraged to bid for support may have sunk considerable effort into a process which, in many cases, has yielded no result – distracting both volunteers and public servants from pursuing existing projects.
In ‘left behind’ neighbourhoods, the barriers to accessing funding via competitive bidding processes are even higher; these places are defined in part by a lack of social capital and civic participation, leading to a lower presence of charitable and third sector organisations which could provide support for writing funding bids. While many people living in ‘left behind’ neighbourhoods want to see their places thrive and will contribute significantly to community-led initiatives to transform them, higher levels of deprivation often mean there are few who are able to commit time to preparing funding bids unpaid – particularly when limited staff and volunteer time is needed to address urgent problems of poverty. There is thus a basic lack of capacity for delivering the work needed to secure funding to build capacity: a ‘chicken and egg’ dilemma from which it is difficult for ‘left behind’ neighbourhoods to escape without some kind of external support or intervention.
Beyond the fundamental capacity constraints ‘left behind’ neighbourhoods face, they are also less likely to have ready access to the extremely specialised skill-set needed to prepare a successful funding bid. More prosperous places, often have access to this skill-set, if only because they can afford to buy it in (APPG for ‘left behind’ neighbourhoods, 2023b). Additionally, the competitive nature of bidding processes discourages collaboration and information sharing among organisations, limiting opportunities for collective learning and innovation – which are required for ‘left behind’ neighbourhoods to develop the capacity they would need to succeed in bidding processes.
Finally, policymakers should consider whether it is realistic or reasonable to expect ‘left behind’ communities to be able to generate and demonstrate the enthusiasm needed to succeed in competitive bidding processes to their satisfaction. After decades of neglect and failed regeneration initiatives, ‘left behind’ neighbourhoods need the system to start investing in them before they will feel able to start investing in it.
Making funding to tackle deprivation dependent on winning in a centrally managed competitive bidding process effectively screens out many of the most deprived neighbourhoods. In many cases, this process ensures decision- makers will never even assess ‘left behind’ neighbourhoods’ need for funding.
A lack of data, capacity and capability in places hinders the development and delivery of projects. Funding often goes to places which are already successful, leaving rural places and small towns behind, with the process stacked against them.
City-REDI, University of Birmingham, written evidence submission to the inquiry.
Administering funds in a more localised and needs-based way could offer several advantages, including increased responsiveness to local needs, enhanced community engagement, and reduced administrative overheads for both community organisations and the public sector. By empowering local actors to manage and distribute funds, resources could be allocated more effectively and efficiently, with a greater focus on the specific priorities and challenges of each ‘left behind’ neighbourhood.
Shifting institutional culture: from control to accountability
The especially centralised UK system of government concentrates power and resources in Westminster and Whitehall, but the centre still relies on local government and public agencies to actually deliver the vast majority of services and programmes it mandates. This places huge importance on the bureaucratic processes chosen to control how these resources are allocated and spent, and in turn makes the metrics for measuring these flows and the outcomes they achieve critical. These technocratic issues attract little debate. But in the context of a modern state deploying trillions of pounds a year even small adjustments to the rules governing the flow of money can have critical consequences for the economy and public services, particularly in ‘left behind’ areas. As one academic study puts it, “public finance is politics hidden in accounting columns” (Manchester Centre for Economic Policy, 2021, p. 14). Inevitably, this culture of control is particularly challenging for local authorities in ‘left behind’ areas whose localised and specific needs are rarely reflected in national appraisal systems.
Over decades, these communities have been left further and further behind. We've got to start to hold our hands up and say, ‘You know what, this centrally led approach to intervention hasn’t worked’. And it hasn't worked because it creates inputs that are designed to fit everywhere, and fit nowhere particularly well. These inputs arrive in a community laden with assumptions and are often trying to overcome decades of decline within three years.
Graeme Duncan, Right to Succeed, oral evidence to inquiry session one
It can be easier to focus on problems that could be characterised as ‘low hanging fruit’ and dealt with through short term interventions. These are often prioritised at the expense of grappling with issues in areas facing significant, complex and intractable challenges and which need sustained, targeted investment, support and resources, and a long term approach. For example, some of the metrics for determining the success of the levelling up missions can incentivise public agencies to focus their efforts and investment in places with at least some pre-existing social infrastructure. This choice will remove ‘left behind’ places from contention, as – by definition – they lack this infrastructure. Similarly, missions assessed by improving levels of, for example, “high quality skills training” impose duties on employers and educational institutions which may not even be present in ‘left behind’ places.
Some commentators have identified a related ‘evidence paradox’, whereby the community-led initiatives that are most likely to have a long-term impact are extremely difficult to measure in terms that will be recognised by policymakers or those who formally evaluate ‘success’ (Studdert, 2021). New evidence is emerging of the impact of investing in social infrastructure and community-led regeneration projects (Frontier Economics, 2021), yet the role of this evidence in policy and funding decisions has so far remained limited. Despite numerous attempts to broaden their focus to take more account of social and wellbeing outcomes, government appraisal methodologies – above all HM Treasury’s Green Book – remain inflexible and too focused on evidence of large- scale efficiencies, short-term impacts, and immediately quantifiable, readily observable results. Such evidence is often harder to produce for the community-led approaches highlighted by many witnesses to the APPG’s inquiry, particularly in ‘left behind’ places (Grayston et al., 2023). The United Kingdom must move towards a culture of trust in which local actors are empowered to act and are then held accountable for their decisions after the fact, rather than a culture of control in which pre-appraisals by the centre replace accountability entirely.
This cultural distance between policy thinking and lived experience in ‘left behind’ neighbourhoods is also manifested by an effective ‘language gap’ between the way that people living in ‘left behind’ neighbourhoods think and talk about their lives, and the terminology used by government and – quite often – by civil society organisations, too. This discourages community actors from getting organised and involved in decision-making, impedes the flow of crucial information in both directions, and limits the transparency and accessibility of decisions that could meaningfully impact levelling up in ‘left behind’ neighbourhoods. None of this is helped by the complexity of multi-tiered local and sub-regional government.
Local authorities are complex, networked institutions, within and between themselves, and are often constructed in hierarchical or siloed ways, with different public services or directorates operating quite separately from other aspects of a council’s work. We must find ways of supporting people living in ‘left behind’ neighbourhoods to overcome these significant cultural barriers if the levelling up agenda is to benefit from their experience and expertise – as it must if it is to succeed.