Changes to UK levelling up policy give firms ‘very little to go on’

Infrastructure expert Jonathan Hart of Pinsent Masons said details of the delays to major projects in procurement, such as the Lower Thames Crossing, and the decision to truncate the HS2-related work at Euston were “leaked ahead of today’s announcement and, perhaps unsurprisingly, did not feature at all in the chancellor’s speech.”

Speaking earlier today, Hunt pledged to create 12 new ‘investment zones’ around the UK, where local authorities could access millions of pounds of government support for regeneration projects. It marks a scaling back of the investment zone policy announced during Liz Truss’s tenure as prime minister. Her growth plan envisaged hundreds of zones around the country, but was abandoned under Rishi Sunak.

Announcing a “refocused” investment zone policy, Hunt identified areas of England that had the potential to host zones, including the West Midlands, Greater Manchester, the North-East, South Yorkshire, West Yorkshire, East Midlands, Teesside and Liverpool. He added that there will also be at least one investment zone in each of Scotland, Wales and Northern Ireland.

“To be chosen, each area must identify a location where they can offer a bold and imaginative partnership between local government and a university or research institute in a way that catalyses new innovation clusters. If the application is successful, they will have access to £80 million of support for a range of interventions including skills, infrastructure, tax reliefs and business rates retention,” Hunt told MPs. After the chancellor’s budget statement, the government published further detail on the policy in a new prospectus (42 pages / 441KB PDF).

The chancellor also set out plans to invest more than £200m in local regeneration projects across England, including the regeneration of Tipton town centre and the Marsden New Mills Redevelopment Scheme. He also announced a further £161m for regeneration projects in Mayoral Combined Authorities and the Greater London Authority.

The government will also provide a further £400m for ‘levelling up’ partnerships to fuel local growth in areas such as Sandwell, Mansfield, Middlesborough, Blackburn with Darwen, Hastings, Torbay, Tendring, Stoke on Trent, Boston, Redcar and Cleveland. In each area, the government will work with local leaders, council mayors and combined authorities, local businesses, community organisations and residents to “identify and address the biggest barriers to levelling up”. The investment in each area will be decided an on a “case by case basis”.

A second round of the City Region Sustainable Transport Settlements will allocate £8.8 billion over the next five-year funding period, and the chancellor said he will increase the £500m Potholes Fund by a further £200 million next year to help local communities.

The budget also included an additional £320m for the Scottish Government, £180m for the Welsh Government and £130m for the Northern Ireland Executive as a result of Barnett consequentials. Hunt also pledged up to £8.6m of funding for the Edinburgh festivals as well as £20m for the Welsh Government to restore the Holyhead Breakwater. In Northern Ireland, the chancellor allocated up to £40m to extend further and higher education participation.

Hart said: “Overall, in terms of positive infrastructure items, there was very little to go on in the budget. There was no reference to any of the flagship programmes under way. Instead, in common with other budgets, there was reference to continuing devolution and local initiatives. We have certainly been here before. We are still working out the consequences of the Free Ports initiative; it remains to be seen what effect the newly announced dozen investment zones might have.”