Insights
The launch of the Government’s Levelling Up Fund (LUF) in March was met with much discussion –and some criticism – about how the fund’s ‘priority places’ were identified. It is important to have a transparent conversation about the funding allocation. But it is also crucial to ensure the £4.8 billion invested through the fund is spent on things that are likely to deliver positive outcomes for the areas that receive a share of the cash.
Using the Levelling Up Fund to deliver economic growth
The first round of the Levelling Up Fund will focus on investments in transport, culture, and regeneration and town centres. Our latest evidence briefing is designed to help places understand the likely local economic effects of these types of projects. Economic improvement is not the only aim of the LUF, and some places may wish to focus on other outcomes. But with economic recovery high on the agenda, we hope this evidence supports those developing proposals which aim to deliver economic growth, in addition to specific project outputs such as renewed public spaces.
The briefing draws on our evidence reviews of transport projects, estate renewal, ‘public realm’ interventions and sporting and cultural events, as well as other data and theory. This blog gives a summary, but anyone developing bids should look at the full briefing as well.
Levelling up and transport investment
Of the eligible interventions, transport projects are the ones for which there is the best evidence of positive economic impacts. However, impacts are highly dependent on context. In struggling places, transport investment might attract new employment and improve productivity but if other factors, such as education and skills, matter more than transport in explaining poor local performance, these issues will need to be addressed as well. If the aim of improved transport links is to boost the labour market, places should consider how they can draw on other funding to invest in skills development and employment support, to accompany capital spending on well-defined transport goals.
Levelling up and physical regeneration
Major physical regeneration such as the London Docklands redevelopment can improve local economic performance, but the evidence suggests that more limited investments in the built environment – which might be funded through the Levelling Up Fund – are unlikely to deliver significant economic improvements in struggling areas. However, physical regeneration of public spaces might have important quality of life impacts for residents by, for example, improving accessibility, encouraging outdoor activity, or reducing social isolation. If places are committed to physical regeneration, resident outcomes and value for money might be better served by funding well-evidenced interventions specifically designed to improve quality of life and related outcomes, than by investing in projects that have unrealistic goals for economic growth.
Using the Levelling Up Fund to increase property value
Transport interventions, estate renewal, and other ‘public realm’ interventions are all identified as investments which can increase property values, in our evidence reviews. Importantly, the evidence suggests these effects will be limited geographically, rather than benefitting a whole town. Decision-makers will therefore want carefully to consider differential impacts when designing their Levelling Up Fund bids.
Economic impacts of cultural investments
Finally, while cultural (and sporting) events or facilities will have a direct effect on jobs, the total employment effects across an area tend to be very small, so they shouldn’t be a major component of a successful job creation strategy. Similarly, the impacts of new facilities tend to be highly localised and mostly seen in higher property prices, suggesting that – if the goal is economic improvement – cultural investments should be used as part of broader strategies rather than stand-alone projects.
Using the evidence to design a Levelling Up Fund application
There are some general lessons from the evidence, even though the specific implications will differ depending on the context and aims of each individual place. Of the projects eligible for funding, transport investments might be the best bet for increasing local economic growth. Transport projects should be chosen to address well specified transport needs, and may need to be accompanied by complementary investments, including in human capital, to deliver growth. Moderate investments in physical regeneration and cultural events and facilities are best considered in terms of whether they improve residents’ daily experience, rather than as potential drivers of growth, unless they are part of a comprehensive programme of change. There are a range of investments which can increase property values, but decision-makers will want to consider who will benefit from price increases, and how this contributes to overall local economic aims.
For more detail on any of these topics you can look at the briefing, which provides links to supporting evidence, and tables summarising potential outcomes for different interventions. If you want to know more about our wider offer – from evidence summaries to bespoke support – you can go to our website, contact us at info@whatworksgrowth.org, or sign up to our newsletter here.
