More from the 2021 Budget – two key regional funding programmes

Last week we saw a plethora of communications on high profile budget announcements, including the extension of the Job Retention Scheme, and the extension to the £20 Universal Credit uplift until September, alongside a range of other developments. I’m not going to replicate those here, but instead give a quick overview of two important regional funding developments of particular interest to the North East and VCSE community that haven't received as much attention.

Firstly, more details were announced on the introduction of the UK Community Renewal Fund, consisting of £220 million in additional funding to help communities prepare for the introduction of the UK Shared Prosperity Fund (UKSPF). This was previously trailed as a programme to pilot approaches for the fund, but they’ve decided to give it another name to avoid confusion with the actual UKSPF, more about which we will find out when the UKSPF Investment Framework is published ‘later in the year’.

The UK Community Renewal Fund

The aim of the new fund is to “help support local areas to pilot imaginative new approaches and programmes that unleash their potential, instil pride, and prepare them to take full advantage of the UK Shared Prosperity Fund when it launches in 2022.”

The fund will have a competitive process that will ‘prioritise projects that target investment at communities in need’. One hundred priority places have been identified and each has a lead authority that will invite project proposals from a range of local applicants, such as district councils, voluntary and community sector organisations and local education providers, including universities. The lead authority will then appraise the projects and submit a shortlist of proposed projects up to a maximum of £3 million per location to the UK government.

In the North East, nine local authority areas have made the priority places list. They are: County Durham, Darlington, Hartlepool, Gateshead, Middlesbrough, Newcastle, Northumberland, Redcar and Cleveland, and South Tyneside. North Tyneside, Sunderland and Stockton on Tees didn't make the list and concerns have been raised both nationally and locally about the methodology used, and the lack of transparency about both how areas were chosen. You can view the list of local authority areas and the lead authority for each in the list attached below.

Other elements of fund to note are:

  • Lead authorities will also receive £20k to run the programme and further capacity building support in preparation for the UK Shared Prosperity Fund.
  • The four investment priorities are:
    • Investment in skills
    • Investment for local business
    • Investment in communities and place
    • Supporting people into employment.
  • The funding is 90 per cent revenue and 10 per cent capital.
  • The fund is interested in bids that build on local insight and knowledge, and project proposals that align with long-term strategic plans for local growth, targeting people most in need and supporting community renewal.
  • Timelines are tight – between March and May, local partners need to be working up bids and submitting them to their lead authority, which must appraise the bids and send their shortlist to government by June 18th. Successful projects will be announced from late July.
  • Projects will need to be delivered between August 2021 and March 31st, 2022 – a period of nine months.
  • It is anticipated that a range of projects will be supported across theme and size, but applicants are encouraged to maximise impact and deliverability through larger projects (£500k+) where possible.
  • Applicants and lead authorities are encouraged to maximise leverage from other funding, but it's recognised that not all projects or applicants will be able to secure match funding, so this isn’t obligatory.
  • Funding will be paid in tranches, some from the project start date and the remainder at the end of the project in March 2022, so cashflow for the second half of the delivery period needs to be considered by applicants.
  • Investment made under this fund should demonstrate the extent of contribution to net zero objectives or wider environmental considerations.

More information and the prospectus can be found at gov.uk, and here is a list of the areas across the UK chosen to implement pilot projects.

****Additional documents including further guidance have been published on gov.uk Tuesday 16th March:  UK Community Renewal Fund: prospectus - GOV.UK (www.gov.uk)****** 

The Levelling Up Fund

Next up is the Levelling Up Fund, which has  to invest £4.8 billion in high value local infrastructure. Some highlights of particular interest:

  • The fund is open to every local area. It is especially intended to support investment in areas in which it can make the biggest difference to everyday life, including ex-industrial areas, deprived towns and coastal communities.
  • It is designed to help local areas select genuine local priorities for investment by putting local stakeholder support, including the local MP where they wish to become involved, at the heart of its mission.
  • It is part of the government’s broader offer to level up opportunity across the UK, including the National Infrastructure Strategy, Plan for Jobs, Community Renewal Fund, Community Ownership Fund and the Towns Fund.
  • In England, Scotland and Wales, funding will be delivered through local authorities.
  • The Levelling Up Fund is competitive, with funding distributed across the UK on the basis of successful project selection.
  • The first round will prioritise bids that can demonstrate investment or begin delivery on the ground in the coming financial year. Bids need to be submitted by June 18th and decisions will be made by Autumn 2021.
  •  There will be future opportunities to bid in subsequent rounds. We would expect all funding provided from the fund to be spent by March 31st, 2024, with exceptions made for larger schemes into 2024-25.
  • Capacity funding will be allocated to local authorities most in need of levelling up in England, as identified in the index published alongside the prospectus. In the index, local authorities are placed into three priority categories. In the North East, the local authorities are as follows:
    • Priority category 1: County Durham, Hartlepool, Gateshead, Middlesbrough, Newcastle, Northumberland, Redcar and Cleveland, South Tyneside, Stockton on Tees and Sunderland
    • Priority category 2: Darlington and North Tyneside.
  • The index is based on a combination of metrics including: need for economic recovery and growth, need for improved transport connectivity, and need for regeneration.  
  • Local MPs are encouraged to be involved – Members of Parliament, as democratically-elected local representatives, are expected to back one bid they see as a priority.
  • The fund will focus investment in projects that require up to £20m of funding. However, there is also scope for investing in larger high value transport projects, by exception.
  • Themes for the first round are: transport investments, regeneration and town centre investment and cultural investment.
  • Projects should be aligned to and support net zero goals. Bids should also consider how projects can work with the natural environment to achieve project objectives, considering at a minimum the project’s impact on our country’s natural assets and nature, as well as the resilience of the capital and infrastructure project to potential hazards such as flooding.

More information can be found in the full prospectus, attached below alongside the index of local authority areas.